ANNUAL REPORT Mazda Toyota Manufacturing, U.S.A., Inc.*2 14 Mazda de Mexico Vehicle Operation Distributors 15 Mazda Motor of America 16 Mazda Canada 17 da de Mexico Sales & Commercial
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YEAR ENDED MARCH 31, 2018
ANNUAL REPORT 2018
01
Since its establishment in 1920, Mazda has continued to be an automobile
manufacturer that embodies the spirit of “never stop challenging.”
In 2012, Mazda introduced its new-generation products, which extensively
employ Skyactiv Technology and Kodo—Soul of Motion design, thereby making
efforts toward structural reforms leveraging Skyactiv Technology. With our
Structural Reform Stage 2 medium-term business plan, which commenced in the
March 2017 fiscal year, we are working to realize sustainable growth by offering
attractive products that achieve both driving pleasure and outstanding
environmental and safety performance. At the same time, we are making
efforts to achieve qualitative business growth and further improve brand value.
In August 2017, we announced “Sustainable Zoom-Zoom 2030,” a new long-
term vision for technology development. Based on our Corporate Vision, this
new long-term vision aims to resolve issues facing people, the earth, and
society through the utilization of driving pleasure, which represents the funda-
mental appeal of the automobile.
Going forward, we hope to create a future in which people, the earth, and
society can coexist with cars, to enrich people’s lives through a car ownership
experience that celebrates driving, and to become a brand with which
customers feel a strong emotional connection.
C O R P O R A T E P R O F I L E
C O N T E N T S
Mazda Highlights
02 History of Mazda
03 Major Product Lineup
04 Global Network
06 At a Glance
Message from Management
08 Message from the President and CEO
12 Interview with the Executive Vice President
Review of Operations
16 Review by Market
Japan
North America
Europe
China
Other Markets
Increasing Corporate Value
22 Long-Term Vision for Technology Development
28 Monotsukuri Innovation
Foundations Underpinning Sustainable Growth
29 Mazda CSR
31 Business Management System
Corporate Governance
Internal Controls
Risk Management
Compliance
Directors, Audit & Supervisory Board Members, and Executive Officers
Financial Section
40 Eleven-Year Summary of Consolidated Financial Statements
42 Business Results, Financial Position, and Cash Flows
45 Business Risks
48 Consolidated Financial Statements
56 Corporate Data / Stock Information
57 Corporate Vision
MAZDA ANNUAL REPORT 2018
Jan. 1920 Toyo Cork Kogyo Co., Ltd., is founded
Sep. 1927 Company becomes Toyo Kogyo Co., Ltd.
Sep. 1930 New plant is constructed in Hiroshima (Aki-gun, Fuchu-cho)
Jul. 1961 Enters into technical cooperation with NSU / Wankel on rotary engines
May 1965 Miyoshi Proving Ground is completed
Nov. 1966 Operations at new passenger car plant (Ujina) in Hiroshima are started
Nov. 1979 Ford Motor Company and Mazda enter into a capital tie-up
Dec. 1981 Operations at Hofu Transmission Plant (Nakanoseki District) are started
Sep. 1982 Operations at Hofu Plant (Nishinoura District) are started
May 1984 Company is renamed Mazda Motor Corporation
Jan. 1985 Mazda Motor Manufacturing (USA) Corporation (MMUC), later called AutoAlliance International (AAI), is established (Ended Mazda6 production in August 2012)
Nov. 1995 Mazda and Ford jointly establish AutoAlliance (Thailand) Company Limited (AAT), a joint venture production company
May 1996 Ratio of Ford’s ownership of Mazda stock is increased from 25% to 33.4%
Oct. 1997 North American operations are streamlined (Mazda North American Operations commences operations)
Mar. 1998 European business is consolidated (Mazda Motor Europe commences operations)
Aug. 1998 Mazda Motor Logistics Europe N.V. is established
Nov. 2000 Medium-term plan “Millennium Plan” is announced
Jan. 2003 Production of Mazda6 commences at FAW Car Company in China
Nov. 2004 Medium-term plan “Mazda Momentum” is announced
Jan. 2005 Mazda Motor (China) is established
Sep. 2005 Joint venture engine production company in China (CFME) is established
Mar. 2007 Medium-term plan “Mazda Advancement Plan” is announced
Mar. 2007 Long-term vision for technology development “Sustainable Zoom-Zoom” is announced
Oct. 2007 Changan Ford Mazda Automobile (present Changan Mazda Automobile) Nanjing Plant commences production of the Mazda2
Nov. 2008 Ratio of Ford’s ownership of Mazda stock is being gradually reduced from 33.4%
Apr. 2010 “Framework for Medium- and Long-term Initiatives” is announced
Feb. 2012 “Structural Reform Plan” is announced
Sep. 2012 Mazda and Sollers establish Mazda Sollers, a joint venture production company in Russia
Nov. 2012 Agreement is reached with Toyota on Toyota vehicle production at Mazda’s new plant in Mexico
Jan. 2013 Business agreement is concluded for the production of sports cars for Fiat Chrysler Automobiles
Jan. 2014 Operations at the Mexico plant (MMVO) are started
Jan. 2015 Production at the Transmission Plant (MPMT) in Thailand is started
Apr. 2015 “Structural Reform Stage 2” medium-term business plan is announced
May 2015 Toyota and Mazda enter into an agreement geared toward the establishment of a business partnership
Mar. 2016 The fourth Mazda MX-5 wins both 2016 World Car of the Year and World Car Design of the Year
Aug. 2017 Long-term vision for technology development “Sustainable Zoom-Zoom 2030” is announced
Aug. 2017 Memorandum of understanding with Toyota concerning a business and capital alliance is concluded
Mar. 2018 MTMUS, a joint venture company with Toyota is established
Mazda Highlights
02 MAZDA ANNUAL REPORT 2018
HISTORY OF MAZDA
Since its establishment in January 1920, Mazda has continued to embody the spirit of “never stop challenging” and worked to provide
products and services that delight customers. In 2020, the Company will reach the 100th anniversary of its establishment. The following
section provides an overview of Mazda’s history.
Oct. 1963Introduction of the first “Familia”
Sep. 1971Introduction of the first “Savanna”
May 1967Introduction of the “Cosmo Sports (110S),” Mazda’s first rotary engine vehicle
Mar. 1978Introduction of the first “Savanna RX-7”
Oct. 1931Production of 3-wheel truck “Mazda-go DA model,” Mazda’s first automobile, begins
May 1960Introduction of “R360 Coupe,” Mazda’s first passenger car
* Launching date is based on the Japanese market.
Jun. 1980“Familia (GLC/323)” is fully redesigned
Oct. 2010Next-generation Skyactiv Technology announced
May 2002Introduction of the first “Mazda6”
Feb. 2012Introduction of “CX-5”
MAJOR PRODUCT LINEUP
Sales markets and production bases: J Japan N North America E Europe C China O Other markets
Notes: 1. Global sales volume is for the March 2018 fiscal year; sales markets and production bases are as of March 31, 2018.
2. Vehicle specifications differ by market.
Global Sales Volume
156,000Sales markets J N E O
Production bases J N O
(Japanese name: Demio)
(Japanese name: Axela)Global Sales Volume
442,000Sales markets J N E C O
Production bases J N C O
Global Sales Volume
152,000Sales markets J N E C O
Production bases J E C O
(Japanese name: Atenza)
Global Sales Volume
160,000Sales markets J N E C O
Production bases J O
Global Sales Volume
72,000Sales markets C
Production bases C
Global Sales Volume
36,000Sales markets O
Production bases O
Global Sales Volume
445,000Sales markets J N E C O
Production bases J E C O
Global Sales Volume
53,000Sales markets N E O
Production bases J
Global Sales Volume
36,000Sales markets J N E O
Production bases J
(Japanese name: Roadster)Global Sales Volume
13,000Sales markets J
Production bases J
Starting in 2012, Mazda began to introduce new-generation models featuring the full range of Skyactiv Technology and
Kodo—Soul of Motion design, which provide both driving pleasure and outstanding environmental and safety performance.
Since our new-generation products were launched, they have been highly evaluated in markets around the world.
MAZDA CX-ḃ
MAZDA CX-Ḅ
MAZDA CX-ḅ
MAZDA CX-Ḉ
MAZDA CX-ḉ
MAZDA Ḃ
MAZDA ḃ
MAZDA Ḇ
MAZDA MX-ḅ
MAZDA BT-50
Mazda Highlights
03MAZDA ANNUAL REPORT 2018
GLOBAL NETWORK
Mazda is based in Hiroshima Prefecture and has major production sites in Japan, Mexico, Thailand, and China. The Company conducts
sales in more than 130 countries and regions around the world. Mazda has established a global network of headquarters, R&D bases,
production facilities, dealerships, and other facilities.
Japan (Number of dealerships: 969)
Headquarters 1 Headquarters
R&D
2 Headquarters R&D Divisions
3 Mazda R&D Center (Yokohama)
4 Miyoshi Proving Ground
5 Mine Proving Ground
6 Hokkaido Kenbuchi Proving Ground
7 Hokkaido Nakasatsunai Proving Ground
Production facilities
8 Hiroshima Plant
9 Hofu Plant
10 Miyoshi Plant
11 Press Kogyo Onomichi Plant*1
North America (Number of dealerships: 803)
Regionalheadquarters / R&D
12 Mazda North American Operations
Production facilities13 Mazda Toyota Manufacturing, U.S.A., Inc.*2
14 Mazda de Mexico Vehicle Operation
Distributors
15 Mazda Motor of America
16 Mazda Canada
17 Mazda de Mexico Sales & Commercial Operation
Europe (Number of dealerships: 1,729)
Regionalheadquarters / R&D
18 Mazda Motor Europe / European R&D Centre
Production facilities 19 Mazda Sollers Manufacturing Rus
Logistics / Sales 20 Mazda Motor Logistics Europe
Distributors
21 Mazda Motors (Deutschland)
22 Mazda Motors UK
23 Mazda Motor Russia
19 others in major markets
Major Facilities (As of March 31, 2018)
36 37
20
23
2218 21
27 33
34
26
28
25 32
31
30
39
19
29 35
24
3
1 2 8
6
7
10
115
9
4
Mazda Highlights
04 MAZDA ANNUAL REPORT 2018
Asia (Number of dealerships: 817)
Regional headquarters / R&D
24 Mazda Motor (China) (MCO) / MCO China Engineering Support Center
Production facilities
25 FAW Car*1
26 Changan Mazda Automobile (Nanjing Company)
27 Changan Ford Mazda Engine
28 AutoAlliance (Thailand)
29 Mazda Powertrain Manufacturing (Thailand)
30 Thaco Premium Automobile Assembly and Manufacturing Limited Liability Company*1
31 Mazda Malaysia
Distributors
32 FAW Mazda Motor Sales
33 Changan Mazda Automobile Sales
34 Mazda Motor Taiwan
35 Mazda Sales (Thailand)
Oceania, Central and South America, Middle East, Africa (Number of dealerships: 778)
Distributors
36 Mazda Australia
37 Mazda Motors of New Zealand
38 Mazda De Colombia
39 Mazda Southern Africa
Hiroshima PlantLocation: Aki-gun, Hiroshima, JapanProduction capacity: 569,000 units per yearModels in production: CX-3, CX-5, CX-8, CX-9, MX-5, Bongo, Sports car for Fiat Chrysler Automobiles
Hofu PlantLocation: Hofu, Yamaguchi, JapanProduction capacity: 416,000 units per yearModels in production: CX-3, CX-5, Mazda2, Mazda3,
Mazda6
Mazda de Mexico Vehicle OperationLocation: Guanajuato, MexicoProduction capacity: 250,000 units per yearModels in production: Mazda2, Mazda3, Compact vehicles for Toyota
Changan Mazda AutomobileLocation: Nanjing, ChinaProduction capacity: 220,000 units per yearModels in production: CX-5, Mazda3
AutoAlliance (Thailand)Location: Rayong, ThailandProduction capacity: 135,000 units per yearModels in production: CX-3, Mazda2, Mazda3, BT-50
81
93
1412
2618
28
HeadquartersLocation: Aki-gun, Hiroshima, Japan
Mazda R&D Center (Yokohama)Location: Yokohama, Kanagawa, Japan
Mazda Motor EuropeLocation: Leverkusen, Germany
Mazda North American Operations Location: California, USA
*1 Consignment production facilities
*2 Start of operations planned for 2021
12
17
15
38
14
16
13
Mazda Highlights
05MAZDA ANNUAL REPORT 2018
AT A GLANCE (March 2018 Fiscal Year)
Global Sales Volume
1,631 thousand units
Production Volume
1,620 thousand units
CO2 Emissions per Unit of Sales Revenue from Production (Four principal domestic sites*1)
18.9 t-CO2/¥100 million
Number of Employees
49,755 people
Sales Volume by Region
Japan / Overseas Production Volume
Sales Volume by Model Type
Number of Sales Countries / Regions
More than 130 countries / regions
Japan13%
North America27%
Japan61%
Overseas39%
Crossover vehicles46%
Passenger vehicles, and others
54%Europe16%
China20%
Australia7%
ASEAN7%
Other10%
27.022.9
19.6
556
18.9
534512
19.7
489
2014 2015 2016 2017 2018(Years ended March 31)
498 6,9779,371
40,89244,035
49,755
10,88146,398
48,849
11,18410,987
37,862 38,87435,21434,66433,915
2014 2015 2016 2017 2018(As of March 31)
*1 Head Office (Hiroshima); Miyoshi Plant; Hofu Plant, Nishinoura District; and Hofu Plant, Nakanoseki District (including R&D and other indirect areas)
*2 CO2 emissions at Mazda’s four principal domestic sites are calculated using the CO2 coefficient based on standards from the Japan Automobile Manufacturers Association Inc.
(JAMA) “Commitment to a Low Carbon Society.” Following the revisions to the coefficient implemented on August 10, 2017, the data for each year has been recalculated.
Furthermore, the power coefficient for the March 2018 fiscal year is undetermined as of May 25, 2018; the March 2017 fiscal year power coefficient is used for the March 2018 fiscal
year. Figures for the CO2 emissions at Mazda’s four principal domestic sites in the March 2018 fiscal year have been verified by a third party.
CO2 Emissions
CO2 Emissions per Unit of Sales Revenue
Number of Employees in Japan
Number of Employees Overseas
CO2 Emissions from Mazda’s Four Principal Domestic Sites*2 / CO2 Emissions per Unit of Sales Revenue(Thousands of tons-CO2/year / t-CO2/¥100 million)
Number of Employees in Japan / Number of Employees Overseas(People)
In the March 2018 fiscal year, Mazda worked to achieve qualitative business growth and to further enhance brand value in accordance
with the Structural Reform Stage 2 medium-term business plan.
Mazda Highlights
06 MAZDA ANNUAL REPORT 2018
Net Sales
¥3,474.0 billion
Operating Income
¥146.4 billion
Operating Income Ratio
4.2%
Net Income Attributable to Owners of the Parent
¥112.1billion
Return on Equity
10.0%
Equity
¥1,192.9 billion
Equity Ratio
43.7%
Interest-Bearing Debt
¥497.9 billion
Full-Year Dividend
¥35 per share
Dividend Payout Ratio
19.1%
158.8
202.9
93.8
125.7134.4
226.8
112.1
146.4135.7
182.1
2014 2015 2016 2017 2018(Years ended March 31)
29.435.2 37.4
41.243.7
2014 2015 2016 2017 2018
660.7
869.6
1,192.9
1,039.4954.0
(As of March 31)
Operating Income / Net Income Attributable to Owners of the Parent(Billions of yen)
Equity / Equity Ratio
(Billions of yen / %)
Operating Income
Net Income Attributable to Owners of the Parent
Equity
Equity Ratio
Mazda Highlights
07MAZDA ANNUAL REPORT 2018
MESSAGE FROM THE PRESIDENT AND CEO
My name is Akira Marumoto, and I was recently appointed Representative Director, President and CEO of
Mazda Motor Corporation.
I would like to thank all of the Mazda Group’s stakeholders, including our shareholders, investors,
customers, suppliers, and local communities, for their ongoing understanding and support.
First, on behalf of everyone at Mazda, I would like to express our heartfelt sympathy to everyone
affected by the record rains in western Japan in July 2018, and to offer our deepest condolences to all
those who lost loved ones in the disaster. As a local company, Mazda will strive to contribute to a rapid
recovery and reconstruction process, and will take steps to assist the disaster-affected regions, such as
providing materials and participating in support activities.
In 2020, Mazda will celebrate its 100th anniversary. Moving forward, we will continue aiming to enrich
people’s lives through various touchpoints, including the manufacture of highly appealing cars, and
become a brand with which customers feel a strong emotional bond. Under a new management system,
we will reinforce our strengths and distinctiveness as we continue to embody the spirit of “never stop
challenging” and take steps to foster sustained growth.
August 2018
Akira Marumoto Representative Director, President and CEO
Message from Management
08 MAZDA ANNUAL REPORT 2018
Overview of the March 2018 Fiscal YearIn the March 2018 fiscal year, under the Structural Reform
Stage 2 medium-term business plan, Mazda worked to
offer appealing products that provide both driving
pleasure and outstanding environmental and safety
performance, to achieve qualitative growth in all areas
of its business, and to further enhance its brand value.
Looking at product initiatives, in the Japanese market
we launched the Mazda CX-8, a new three-row cross-
over SUV. Since its launch in December 2017, the model
has continually exceeded sales volume targets. We also
expanded and improved our lineup of advanced safety
technologies in an effort to provide safety and peace of
mind to a wider range of customers. In production, we
worked to create a flexible production system in order
to respond rapidly to the growing demand for crossovers
around the world. In August 2017, for example, we
expanded the crossover vehicle production capacity at
our Hiroshima Plant, and in October we commenced
production of the all-new Mazda CX-5 crossover at the
Hofu Plant.
Also in August 2017, Mazda announced “Sustainable
Zoom-Zoom 2030,” its long-term vision for technology
development that looks ahead to the year 2030. In light of
the significant changes in the automobile industry, the new
vision takes a longer-term perspective and sets out how
Mazda will make use of driving pleasure—the fundamental
appeal of the automobile—to help resolve issues facing
people, the earth, and society. We announced plans for
the introduction in 2019 of our next-generation engine,
Skyactiv-X, the world’s first commercial gasoline engine
to use compression ignition, as the first step toward the
realization of this vision.
Furthermore, in August 2017 Mazda and Toyota Motor
Corporation (hereinafter called Toyota) signed an agree-
ment to enter a business and capital alliance, with the
aim of further strengthening our lasting partnership.
Specifically, the two companies agreed to establish a joint
venture final assembly plant to produce vehicles in the
United States, to jointly develop technologies for electric
vehicles (EVs), to collaborate in the area of next-generation
technologies, including connected technologies and
advanced safety technologies, and to further complement
each other’s product lineup. In October 2017, in accor-
dance with the agreement, Mazda and Toyota each
acquired shares of the other company in order to develop
and strengthen their long-term partnership and to pursue
ongoing collaboration in a manner that respects the
autonomy and equality of each company.
Moving forward, the two companies will further accel-
erate and enhance mutual cooperation as long-term
partners with the aim of creating new types of value for
future mobility and will strive to contribute to the devel-
opment of a sustainable society by meeting customers’
expectations.
Outlook for the March 2019 Fiscal YearIn the March 2019 fiscal year, the Company will take
steps to bolster sales and improve profits. To that end,
we will strengthen our competitiveness through the
introduction of updated models, and plan to launch the
first next-generation product at the end of the fiscal year.
Furthermore, we will introduce the CX-8, which is
enjoying strong sales in Japan, to overseas markets,
including Australia and China. In terms of production,
we will further enhance the flexibility of our crossover
production system by starting two-shift operations at
Hofu Plant No. 2.
As for business targets for the March 2019 fiscal year,
which is the final year of Structural Reform Stage 2, we
expect to exceed the global sales volume target of 1.65
million units. Although the equity ratio will be slightly
below target, we do expect it to show steady improve-
ment. On the other hand, the operating income ratio is
expected to be 3.0 percent, below our target of 5 percent
or more. This is mainly due to missed volume and profit
targets in the United States, as well as costs to comply
with environmental regulations and expenses associated
with the sales network reform in the United States.
Targets for the March 2019 Fiscal Year
Announced in April 2017
Announced in April 2018
Global sales volume 1.65 million units
1.662 million units
Operating income ratio 5% or more 3.0%
Equity ratio 45% or more 44%
Dividend payout ratio 20% or more 28%
09MAZDA ANNUAL REPORT 2018
Message from Management
Review of the Structural Reform Plan and the Structural Reform Stage 2 Medium-Term Business PlansMazda started the Structural Reform Plan in the March
2013 fiscal year and the Structural Reform Stage 2 in the
March 2017 fiscal year. Under these plans, we have
worked to implement major initiatives in the areas of
products, sales, production, and finance. We achieved
stable growth in global sales volume of 50,000 units a
year, from 1.25 million units in the March 2012 fiscal
year to a forecast 1.66 million units in the March 2019
fiscal year.
This growth in sales volume was driven by the intro-
duction of new-generation models featuring the full
range of Skyactiv Technology and Kodo—Soul of Motion
design. We began to launch these new-generation
models in 2012. Furthermore, by continually updating
models with our latest technologies and new equip-
ment, including advanced safety features, we created
an appealing lineup.
In sales, we promoted “right price” sales by empha-
sizing our brand value, and took steps to enhance trade
cycle management by improving residual values. In these
ways, we strengthened our sales capabilities globally.
Moreover, we promoted sales network reforms in the
United States and other countries to improve customer
care and launch new-generation dealerships.
In the area of Monotsukuri, Mazda advanced highly
efficient development and production through bundled
product planning and common architecture as well as
computer modeling-based development. In manufac-
turing, we strengthened overseas production in Mexico,
Thailand, and other countries, and established a flexible
production system that makes it possible for plants to
complement each other when changes in demand occur.
In March 2018, in cooperation with Toyota we established
a joint venture company for the production of vehicles in
the United States, and preparations are under way for
the start of production in 2021.
Looking at alliances, in addition to our previous tie-up
strategy calling for optimal complementarity in products,
technologies, and regions, we have begun the process of
building a medium- to long-term business partnership
with Toyota based on cooperation and competition in
line with our business and capital alliance agreement.
In finance, we strengthened our financial foundation,
achieving a net cash position and improving our equity
ratio. In regard to shareholder returns, we are working to
pay stable and steadily increasing dividends, making a
dividend payout ratio of 20 percent or more our standard.
The Company did achieve quantitative growth during
the periods covered by the Structural Reform Plan and
the Structural Reform Stage 2. However, I believe that
our results in the area of qualitative growth, which we
positioned as Mazda’s most important challenge, were
not satisfactory. Due to intensifying sales competition
globally, profit per unit declined, and unit sales and
profit did not meet targets, principally in the U.S. market.
This resulted in a decline in profitability in the final year
of Structural Reform Stage 2.
Direction of Future FrameworksWe are currently formulating the next medium-term
business plan, taking into account progress made during
Structural Reform Stage 2. In advance of its release, we
have announced the “Direction of Future Frameworks” as
the basic direction of our future initiatives for sustainable
growth.
Mazda regards the next three years as a time to secure
a solid foundation for strong growth from the March
2022 fiscal year. On that basis, we will work to enhance
product competitiveness through the development and
introduction of next-generation technologies and
products, and will accelerate the reform of our sales
network, particularly in the United States, while
maintaining stable growth of 50,000 units per year. In
addition, we will progress our alliances with Toyota and
other companies and leverage the start of operations at
the new plant in the United States as we work to estab-
lish a global production and sales framework with a
capacity of 2 million units annually by the March 2025
fiscal year.
In product and technology development, we will strive
to create a competitive new product lineup. We will
enhance product competitiveness through advances in the
internal combustion engine and by accelerating the devel-
opment of next-generation technologies and products,
such as electrification technologies, autonomous driving,
and connectivity, and next-generation design.
At the same time, Mazda will strengthen its sales
foundation on a global basis. In our most important
market, the United States, we aim to create a sales
network capable of selling 400,000 units per year by
2021. To that end, we will roll out marketing strategies
that address market characteristics and increase the
number of new-generation branded dealers in an effort
to improve customer retention rates and increase sales
volume per dealer. Over the next four years, in order to
reinforce the sales network we will invest approximately
¥40 billion in the realignment of the sales network.
Targeting the establishment of a 2-million-unit
production system, the Company will work to generate
profit and cash flow to invest in growth. Over the next
four years, investments to secure future growth are
Message from Management
10 MAZDA ANNUAL REPORT 2018
expected to boost overall investment by ¥250 billion
compared to usual levels. The increase will include
investment in the new U.S. plant and in next-generation
products. A high level of investment will continue,
but we will strive to generate operating cash flows by
maximizing production efficiency and stepping up cost
improvement activities to invest in growth.
Moving forward, these investments will enable Mazda
to increase sales in major markets and improve profit-
ability as we aim to achieve both sustainable growth and
shareholder returns.
Shareholder ReturnsMazda positions shareholder returns as one of its most
important management issues. Our basic policy is to
determine the dividend amount in consideration of our
financial results for the fiscal year, the business environ-
ment, our financial position, and other factors. Under
this policy, we strive to pay a stable and steadily
increasing dividend.
For the March 2018 fiscal year, we paid a full-year
dividend of ¥35 per share, consisting of a ¥15 per share
interim dividend and a ¥20 per share year-end dividend.
For the March 2019 fiscal year, we also plan to pay a full-
year dividend of ¥35 per share, consisting of a ¥15 per share
interim dividend and a ¥20 per share year-end dividend.
Targeting Sustainable GrowthBy introducing products with outstanding environmental
and safety performance, we aim to contribute to social
issues, such as environmental conservation and the
realization of a safe and secure society, while enhancing
our corporate value over the medium to long term.
Under our new management system, we will reinforce
our strengths and distinctiveness as we continue to
embody the spirit of “never stop challenging” and take
steps to foster sustained growth.
We will also work to disclose information to our
shareholders and other investors in a timely and appro-
priate manner and engage in constructive dialogue with
them. At the same time, we will continue to place the
utmost priority on further enhancing our corporate
governance structure with the aim of realizing sustainable
growth. Going forward, we will draw on the comprehen-
sive strengths of the Mazda Group in an effort to be a
company that earns the sincere trust of all our share-
holders, investors, and other stakeholders.
I would like to ask our shareholders and other investors
for their continued support as we pursue these endeavors.
Image of Future Growth
* Forecast for the March 2019 fiscal year onward. As these forecasts involve risks and uncertainties, there is a possibility that our actual business performance will differ significantly from the forecasts.
Solid foundation Stronger growth
Global sales (units)
Operating income
Operating income ratio
1.66 million
1.80 million
2.00 million
3%
5% or more
(Years ended March 31) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
• Start operations at U.S. joint-venture plant
Next Mid-term PlanStructural Reform Stage 2Structural Reform Plan
U.S. sales network reform
SKYACTIV (2nd Generation)SKYACTIV (1st Generation)
11MAZDA ANNUAL REPORT 2018
Message from Management
INTERVIEW WITH THE EXECUTIVE VICE PRESIDENT
Q1
The operating environment in the automobile industry is undergoing significant
change, and in this setting as “One Mazda” we will steadily implement initiatives
to achieve strong growth from the March 2022 fiscal year.
Kiyoshi FujiwaraRepresentative Director and Executive Vice President
Would you provide an overview of future initiatives in product and technology development?
With the second generation of Skyactiv, Mazda will advance toward a competitive new product lineup. We will optimize our product strategy in terms of customer needs, segment characteristics, profit, and costs.
Mazda developed Skyactiv Technology, thoroughly
improving the fundamental vehicle technologies that
decide a car’s basic performance, and began introducing
new-generation models that feature the full range of these
technologies, starting with the CX-5 in 2012. Skyactiv
Technology and new-generation products delivered
outstanding driving and fuel economy performance. In
addition, through initiatives in Monotsukuri Innovation,
such as common architecture and bundled product
planning, under which optimized structures for each
function are shared across models in different vehicle
classes and deployed to all car lines, Skyactiv Technology
and new-generation products have also supported
increased efficiency in development and production and
cost improvements, and driven growth in unit sales and
structural reforms.
Targeting the realization of “Sustainable Zoom-Zoom
2030,” the long-term vision for technology development
that we announced in August 2017, Mazda is moving
forward with the development of next-generation
technologies, including the second generation of Skyactiv
Technology. At the 45th Tokyo Motor Show in 2017, we
unveiled the Mazda Kai Concept, which features the
Skyactiv-X next-generation gasoline engine; Skyactiv-
Vehicle Architecture, which takes the Company’s human-
centered car-making philosophy to a new level; and a
matured Kodo—Soul of Motion design. We also unveiled
the next-generation design vision model, the Mazda
Vision Coupe. We plan to introduce next-generation
technologies, including Skyactiv-X, from 2019.
In regard to the Direction of Future Frameworks, we will
aim to establish a highly competitive new lineup with the
Message from Management
12 MAZDA ANNUAL REPORT 2018
Small product group (centered on CX-3 / Updated CX models)
Large product group (centered on CX-5)
Skyactiv-X, Skyactiv-D Gen 2
Skyactiv-G/D Upgrade
EV, Plug-in HEV, Mild HEV
Range Extender
Mazda Co-Pilot Concept
New-Gen Mazda Connect
Q2
second generation of Skyactiv technologies. Specifically,
to achieve further progress from the first generation, we
will move on from the single architecture that we devel-
oped under the bundled product planning concept with
a 1.25-million-unit system. We will divide our architecture
into two product lineup categories—small products and
large products. With a view toward a 2-million-unit
system, under these two categories we will optimize our
product strategy from such perspectives as customer
needs, segment characteristics, profit, and costs.
Furthermore, looking at our production capacity, which
supports sales, we will strive to make better use of existing
capacity, and will add the new U.S. plant, which is sched-
uled to start operations in 2021. In these ways, we will
build a system that can produce 2 million units and will
enhance our ability to provide customers with the vehicles
that they truly want.
What are the objectives of the new product strategy?
By dividing the product lineup into two architectures, Mazda will expand global production of crossover models, improve net revenue by strengthening high- value-added products, and strengthen its business in the U.S. market.
In small products, we will aim for annual sales of around
1.2 million units, centered on the Mazda CX-3 and a new
crossover model. We will respond to the demand for
crossovers by leveraging the high cost competitiveness our
efficient car making enables, and by continuing to
enhance our flexible global production system, particu-
larly with overseas production of the CX-3. Moreover, we
plan to build a model belonging to the small products
category at the new U.S. plant. In conjunction with the
Mexico plant, we will improve business efficiency to
enhance our cost competitiveness in the United States,
while bolstering our ability to provide customers with the
vehicles that they truly want.
In large products, we will aim for annual sales of
around 800,000 units, centered on the CX-5 but also
including the CX-8 and CX-9. We will work to build
product competitiveness and enhance brand value, and
will offer a wider range of powertrains, including electrifi-
cation. In these ways, we will strive to improve net
revenue (sales minus sales incentives) with a lineup of
high-value-added products that meet the high expecta-
tions of customers. In other words, we will offer a lineup
of products that people truly want.
Through this new product strategy, we will aim to
expand global production of crossover models, improve
net revenue by strengthening high-value-added products,
and strengthen our business in the U.S. market. We will
announce details of these initiatives at an appropriate time.
i-Activsense
Mazda Connect
HEV (with technology
provided by Toyota)
Skyactiv-G/D
Bundled product planningArchitecture
New product lineup
Sales volume 1.25 million units 1.66 million units 2.00 million units
Combustion engine
Electrification
Other
SKYACTIV (2nd Generation)
Increase of 410,000 units
Increase of 340,000 units
SKYACTIV (1st Generation)
13MAZDA ANNUAL REPORT 2018
Message from Management
Please discuss the sales network reforms in the United States.
Mazda is aiming to build a U.S. sales network that can sell 400,000 units per year in 2021. To that end, we will promote qualitative growth through higher brand engagement and medium- to long-term quantitative growth, and will reinforce investment in realignment of the sales network.
Looking back at our initiatives to date, over the two-year
period from 2016 we worked to reestablish our sales
network based on Mazda brand value management. The
objective of these initiatives was to increase the quality of
dealerships, so that our locations and staff create exciting
venues that draw customers who look forward to engaging
with products that they truly want. Specifically, we imple-
mented a conversion to strong dealers who endorse
Mazda’s brand value management, and began to establish
next-generation branded dealers. In addition, we created
a roadmap for the reestablishment of the optimal sales
network in 35 priority markets.
Results to date include steady improvements in repur-
chase rates, sales of certified pre-owned vehicles, service
retention, and dealer profitability. Business quality is
improving. We will continue working to improve the
customer experience through enhanced training for dealer
staff and trade cycle management initiatives. In these ways,
we will improve residual values, keep incentives in check,
and achieve “right price” sales. Over the period to 2021,
we will execute network enhancement and focus on
growth in priority markets. Specifically, we will expand
to 300 next-generation branded dealers, mainly in 35
priority markets. We will also strive to achieve an average
of 1,000 unit sales per year among next-generation
branded dealers and a repurchase rate of 55 percent
in 35 priority markets.
At the same time, we will overhaul our marketing
strategy and roll out a strategy that addresses the charac-
teristics of each market.
We will implement these initiatives and accelerate the
construction of a U.S. sales network that can sell 400,000
units per year by 2021, when the U.S. plant will start
operations. In these ways, we will advance quantitative
growth over the medium to long term.
What is Mazda’s approach to alliances?
In addition to optimal complementarity, we will continue to deepen our strategic collaboration with Toyota and suppliers.
Mazda is promoting alliance strategies that foster optimal
complementarity in the areas of product, technology, and
regions, based on equal partnerships.
In particular, in the development of next-generation
technologies, in addition to strengthening our competi-
tiveness through next-generation Skyactiv engines and
other advances in the internal combustion engine, we
also need to address a wide range of fields, such as
electrification, autonomous driving, and connectivity.
Our basic approach is to work together with each
alliance partner leveraging our strengths to implement
co-creation based on equal effort by equal partners, while
advancing our technologies and development and
production processes such as bundled product planning
and computer modeling-based development, which are
our strengths. In a number of fields, we will aim to further
deepen strategic alliances with Toyota and suppliers and
realize win–win alliances. Of course, we will also advance
collaboration with other partners.
Would you describe the Company’s progress in its alliance with Toyota?
In accordance with the agreement signed in August 2017, we are moving ahead with initiatives to foster collaboration in joint projects.
In regard to the establishment of a joint venture to
produce vehicles in the United States, we will build a new
plant with an annual production capacity of 300,000
units, and are advancing preparations for the start of
operations in 2021. In January 2018, we decided to build
the new plant in Huntsville, Alabama, and in March 2018
we established Mazda Toyota Manufacturing, U.S.A., Inc.,
a joint venture company. With equal funding contributions,
Mazda and Toyota are investing $1.6 billion toward the
Q5
Q3
Q4
Next-generation branded dealers in the United States
Message from Management
14 MAZDA ANNUAL REPORT 2018
the strengths of each company, including Mazda’s bundled
product planning and prowess in computer modeling-
based development, Denso’s electronics technologies, and
Toyota’s electrified vehicle technologies, which have been
cultivated through its hybrid vehicles over more than 20
years, the partners will innovatively and efficiently advance
the development of basic structural technologies for EVs
capable of covering a wide variety of vehicle segments and
types.
In addition, in accordance with the agreement, we are
moving forward with initiatives involving collaboration
in areas of next-generation technologies, including
connected technologies and advanced safety technolo-
gies, and working to further complement each other’s
product lineups.
The operating environment in the automobile industry
is undergoing significant change. In this setting, as “One
Mazda” we will steadily implement initiatives to achieve
strong growth from the March 2022 fiscal year.
August 2018
Kiyoshi FujiwaraRepresentative Director and
Executive Vice President
new plant, which is expected to create approximately
4,000 jobs. Mazda and Toyota will each have a produc-
tion line, and plans call for the production of 150,000
units of a Mazda crossover model to be newly introduced
to the North American market and 150,000 units of the
Toyota Corolla. Currently, the two companies are lever-
aging their expertise, primarily through project members,
as they consider planning and supply chain for the
construction of a competitive plant. Full-scale construc-
tion of the new plant is expected to commence in 2019.
Looking at the joint development of technologies for
EVs, there is rising demand and anticipation for EVs
around the world. There is a need to respond flexibly
and efficiently to the trends of the developing EV market,
which are difficult to predict as this is a transitional period
in which related technologies are making significant
progress, and the market is in its early stages. To that end,
Mazda and Toyota have agreed to mobilize their capacities
and exchange expertise freely and actively while jointly
developing basic structural technologies for EVs that are
competitive and can flexibly and promptly respond to
regulations and market trends in various countries. In
September 2017, Mazda, Denso, and Toyota signed a joint
technology development contract for EVs and established
a new company, EV C.A. Spirit Co., Ltd. Subsequently,
other automakers who agree with the underlying premise
of the project also decided to participate. The agreement
covers a diverse range of models, from micro-minis to
passenger vehicles, SUVs, and light trucks. By combining
Details of the Business and Capital Alliance
1. Establish a joint venture that produces vehicles in the United States
Establishment of joint-venture company Mazda Toyota Manufacturing, U.S.A., Inc.
• Location: Huntsville, Alabama • Ratio of capital contribution: Mazda: 50%, Toyota: 50% • Date of establishment: March 1, 2018 • Production capacity: 300,000 units per year (150,000 units each for Mazda and Toyota) • Production model:
Mazda: Crossover model that will be newly introduced in the North American market Toyota: Corolla
• Start of production: 2021 • Employment: Approximately 4,000 employees
2. Jointly develop technologies for EVs
Joint development of technologies related to the basic structure of highly competitive EVs with the aim of responding swiftly and efficiently to trends in the EV market, which are difficult to predict
3. Collaborate in areas of next-generation technologies, including connected technologies and advanced safety technologies
Jointly develop in-vehicle multimedia system technologies in order to be prepared for increased use of in-car information and heightened demand for connected technologies that link the inside of a car with the outside world
With the aim of realizing an accident-free and safe automotive society, collaborate in the development of Toyota’s technology for communication between vehicles and between the road and vehicles
4. Further supplement each other’s product lineup
Continue supply of compact sedans to Toyota in North America Receive supply of compact commercial “two-box” vans from Toyota in Japan Further explore the possibilities of other complementary products on a global scale
15MAZDA ANNUAL REPORT 2018
Message from Management
JAPAN
REVIEW BY MARKET
Overview of March 2018 Fiscal Year Results
Total demand in the Japanese market rose 2% year on year, to 5.20 million units. While demand for registered
vehicles declined 1%, demand for light vehicles recovered from the negative impact of tax hikes, rising 8%.
Mazda’s sales volume increased 4% from the previous fiscal year, to 210,000 units. This increase was due to
the contributions of the all-new Mazda CX-5, which was fully redesigned in March 2017, as well as the new
Mazda CX-8, which commenced sales in December 2017.
Mazda promoted the standardization of i-Activsense advanced safety technology, which helps drivers recog-
nize potential hazards, exercise good judgment and operate their vehicle in an appropriate fashion. As a result
of this promotion, all of the major seven models Mazda sells in Japan (Mazda Demio, Mazda Axela, Mazda
Atenza, Mazda CX-3, CX-5, CX-8, and Mazda Roadster*1) qualify for the “Safety Support Car S-Wide” ranking
among “Safety Support Cars,” which represent a type of vehicle being promoted by the Ministry of Economy,
Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism to enhance driving safety.
*1 The Roadster qualifies for the “Safety Support Car S-Wide” due to updates announced in June 2018.
March 2019 Fiscal Year Forecast
Mazda’s sale volume is expected to increase 2% year on year, to 215,000 units.
In addition to the CX-8, which is realizing solid sales, Mazda will continue to enhance and update its products,
including the CX-3, which has been outfitted with the newly developed clean diesel engine Skyactiv-D1.8. This
engine has improved fuel efficiency and environmental performance.
Through marketing efforts that draw on Mazda’s superior product strength, as well as its brand and art of car
making, the Company will aim to increase sales volume and enhance the customer experience of owning
a vehicle.
The CX-8 Receives JNCAP’s Highest Rating in the Fiscal 2017 Preventative Safety Performance Assessment and Collision Safety Performance Assessment
Within the Fiscal 2017 JNCAP*2 Automobile Assessments, the CX-8
achieved the highest rating of all vehicles that received the Collision
Safety Performance Five Star Award. In addition, the CX-8 received
the highest ASV++ rating within the JNCAP Preventative Safety
Performance Assessment. The receipt of these ratings verified the
safety performance of the CX-8 in all areas, from reducing the risk
of accidents to mitigating collision damage.
Mazda Demio
CX-8
(Years ended March 31)
2015 2016 2017 2018
215210
4.0 4.04.74.2
232203
225
2019 (Forecast)
TO
PIC
*2 The Japan New Car Assessment Program (JNCAP) is a vehicle safety performance evaluation started in the March 1996 fiscal year by the Ministry of Land, Infrastructure, Transport and Tourism and the National Agency for Automotive Safety and Victims’ Aid for promoting the spread of safe automobiles. JNCAP evalu-ates various aspects regarding the safety performance of vehicles currently on the market, and has been disclosing the results of evaluations on collision safety performance and preventative safety performance.
Sales Volume Sales Volume (Thousands of units) Market Share (%)
Review of Operations
16 MAZDA ANNUAL REPORT 2018
NORTH AMERICA
Overview of March 2018 Fiscal Year Results
Total demand in the United States declined 1% compared with the previous fiscal year, to 17.31 million units. In
Canada, total demand was up 4%, to 2.05 million units, while total demand in Mexico fell 9%, to 1.49 million
units. As a result, overall demand in North America decreased 1%. Mazda’s sales volume grew in the North
American market at a rate that surpassed growth in demand in each country, rising 1%, to 435,000 units.
In the United States, despite a decline in demand for sedans and stiffer competition in the sedan market, brisk
sales of crossovers—including a 29% increase in sales of the new CX-5 and a 28% increase in sales of the
Mazda CX-9—resulted in a 1% increase in Mazda’s sales volume, to 304,000 units.
In Canada, demand declined for sedans. On the other hand, higher demand for crossovers led to sales growth
for the CX-3, CX-5, and CX-9. As a result, Mazda’s sales volume increased 5%, to 75,000 units.
In Mexico, amid a trend of declining overall demand, Mazda’s sales volume rose 2%, to 55,000 units, thanks to
the contributions of the new CX-5, and the updated CX-3 and Mazda2.
March 2019 Fiscal Year Forecast
Mazda’s sales volume is expected to increase 5% year on year, to 457,000 units.
In the United States, sales volume is projected to rise 4%, to 317,000 units. Mazda will continue efforts to
increase sales volume through crossovers such as the CX-5 and the CX-9, which are achieving healthy sales, in
addition to the updated Mazda6. Furthermore, Mazda will continue to improve the quality of its businesses by
such means as strengthening its sales network and increasing the owner retention ratio.
In Canada, sales volume is expected to increase 3%, to 77,000 units, as a result of the increased sales volume
of crossovers. In Mexico, where overall demand is expected to continue to decline, Mazda is anticipating a 13%
increase in sales volume, to 62,000 units, owing to the introduction of the Mazda2 sedan in July 2018 as well
as the updated Mazda6 and the strong-selling CX-5.
Mazda Leads Manufacturer Adjusted Fuel Economy in U.S. Environmental Protection Agency Report for Fifth Straight Year
The Light-Duty Fuel Economy Trends Report of the U.S. Environmental
Protection Agency summarizes fuel economy trends of various vehicle
types sold in the United States for the 2016 model year. The report
presents such items as the results of calculations for manufacturer
adjusted fuel economy by company. Mazda’s overall adjusted fuel
economy for the 2016 model year was 29.6 miles per gallon (MPG),
a 0.4 mpg improvement over the previous year, ranking the Company
No. 1 overall for the fifth consecutive year. Mazda CX-9
Mazda6 (Years ended March 31)
2019 (Forecast)
2015 2016 2017 2018
457
1.71.8
1.71.8
429425 435
131 140
317 304302
127
306306
119 132
438
TO
PIC
Sales Volume Sales Volume in the United States (Thousands of units)
Sales Volume in Canada and Other Markets (Thousands of units)
Market Share in the United States (%)
17MAZDA ANNUAL REPORT 2018
Review of Operations
EUROPE
Overview of March 2018 Fiscal Year Results
Total demand in Europe was up 2% from the previous fiscal year, to 20.25 million units, while Mazda’s sales
volume rose 3%, to 269,000 units. While the Company recorded robust sales in Germany and Russia, sales in
the United Kingdom declined due to the impact of decreasing demand.
By vehicle, amid the falling demand for sedans, sales volume of crossovers rose on the back of solid sales of
such models as the CX-3 and the new CX-5, with sales for the latter commencing in full in May 2017.
March 2019 Fiscal Year Forecast
While demand in Russia is expected to continue to improve, the decline in the ratio of diesel-powered vehicles
and tightening environmental regulations will likely have an impact on the Company’s performance. Accordingly,
Mazda is projecting a decrease of 1% year on year in sales volume, to 265,000 units.
By vehicle, sales volume of the strong-selling CX-5 is expected to increase. On the other hand, Mazda expects
the sales volume of the Mazda3 and Mazda6 to decline amid a forecast of a continued decrease in demand
for sedans.
Mazda will continue to roll out various initiatives in Europe related to sales, marketing, communication,
services, and finance, with the aim of improving brand value centered on an enhanced customer experience.
Mazda CX-5
Sales Volume Sales Volume (Thousands of units) Market Share (%)
(Years ended March 31)
2019 (Forecast)
2015 2016 2017 2018
265
1.31.3
1.41.3
262229
269257
Mazda Vision Coupe Wins Concept Car of the Year in Europe
The Mazda Vision Coupe won Concept Car of the Year at
the 11th Car Design Night in Geneva, Switzerland, which
was held on March 6, 2018 (local time), and hosted by
Car Design News.
This was the second global award received by the
Mazda Vision Coupe, after being named the “Most
Beautiful Concept Car of the Year” at the 33rd Festival
Automobile International, which was held on January
30 (local time) in Paris.
TO
PIC
Mazda Vision Coupe
Review of Operations
18 MAZDA ANNUAL REPORT 2018
CHINA
Overview of March 2018 Fiscal Year Results
Total demand increased 2% year on year, to 29.06 million units. This increase was driven by the steady sales
growth of crossovers, although demand for sedans continued on a downward trend.
The Mazda3 Axela continued to enjoy robust sales even after the conclusion of tax reductions on small-engine
vehicles in January 2018. In addition, sales volume rose for the Mazda6 Atenza, the Mazda CX-4, and the new
CX-5. These results contributed to a sales volume increase of 11%, to a record-high 322,000 units.
March 2019 Fiscal Year Forecast
Mazda is projecting that sales volume will remain on a par with the previous fiscal year, at 322,000 units.
Although the Company anticipates a decline in sales of the Mazda3 Axela due to a reactionary loss following
the conclusion of tax reductions for small-engine vehicles and the lower demand for sedans, it believes the full-year
contributions from the new CX-5 and the introduction of the new CX-8 will contribute to maintaining sales
volume levels.
To improve brand value in China, Mazda has been implementing initiatives to strengthen its primary brand.
These initiatives work to raise the level of recognition for Skyactiv Technology and Kodo design as well as
enhance Mazda’s brand image. To prepare for the introduction of next-generation products, Mazda plans
on holding explanatory meetings for new technologies and design forums with the aim of raising the level of
recognition and promoting an understanding of the next-generation gasoline engine Skyactiv-X and the evolu-
tion of the Kodo design.
Mazda CX-4 (Years ended March 31)
2019 (Forecast)
2015 2016 2017 2018
322
1.01.1
0.9 0.9
292
215
322
235
Sales Volume Sales Volume (Thousands of units) Market Share (%)
Mazda Exhibits the CX-8 at the Beijing Motor Show, Plans to Launch CX-8 in Second Half of 2018
As SUVs that can fit seven people gain popularity in the
Chinese market, Mazda exhibited the CX-8 at the 2018
Beijing International Automotive Exhibition. The CX-8 is
slated to hit the Chinese market in the second half of 2018
and will be produced at the Changan Mazda Automobile
production facility. The Chinese version of the CX-8 will
be able to fit seven people and will be equipped with a
2.5-liter gasoline engine.
TO
PIC
new Mazda CX-8
19MAZDA ANNUAL REPORT 2018
Review of Operations
OTHER MARKETS
Overview of March 2018 Fiscal Year Results
Mazda’s sales volume in other markets, which include the markets of Australia and ASEAN, rose 5% year on
year, to 394,000 units.
Sales volume in Australia fell 2%, to 116,000 units. Although the sales volume of the Mazda3 decreased due
to an intensifying competitive environment, the CX-5 and the CX-9 were able to maintain solid sales. Mazda
also continued to achieve the second-highest sales in Australia by manufacturer. Furthermore, since its launch
in 2012, the CX-5 has remained in the No. 1 position in terms of sales volume in its segment.
Sales volume in the ASEAN market climbed 11%, to 116,000 units, on the back of solid sales in such major
markets as Thailand and Singapore.
March 2019 Fiscal Year Forecast
Mazda’s overall sales volume in other markets is expected to rise 2% year on year, to 403,000 units.
In Australia, the Company forecasts a 1% increase in sales volume, to 117,000 units, as it aims to expand sales of
crossovers, which continue to grow, centered on the strong-selling CX-5 and the CX-9 as well as the recently
introduced new CX-8.
In the ASEAN market, sales volume is expected to be up 6%, to 123,000 units. Throughout the ASEAN region,
starting with the major markets of Thailand and Vietnam, Mazda aims to achieve growth in sales volume by
strengthening efforts to enhance customer satisfaction levels.
Mazda CX-3
2019 (Forecast)
(Years ended March 31)
2015 2016 2017 2018
403373
303
394372
Sales Volume Sales Volume (Thousands of units)
Mazda Opens Engine Machining Factory at Thai Powertrain Plant
Working to enhance its comprehensive production system in
Thailand for engines, transmissions and complete vehicles, Mazda
has invested an additional ¥22.1 billion to establish the machining
factory and increase the capacity of the existing engine assembly
line in order to raise engine production capacity at Mazda
Powertrain Manufacturing (Thailand) Co., Ltd. from 30,000 to
100,000 units per year.
TO
PIC
The engine plant at MPMT
Review of Operations
20 MAZDA ANNUAL REPORT 2018
INCREASING CORPORATE VALUE22 Long-Term Vision for Technology Development
28 Monotsukuri Innovation
Skyactiv-X
21MAZDA ANNUAL REPORT 2018
Increasing Corporate Value
LONG-TERM VISION FOR TECHNOLOGY DEVELOPMENT
Sustainable Zoom-Zoom 2030
At Mazda, we see it as our mission to bring about a beautiful earth and to enrich people’s lives as
well as society. We will continue to seek ways to inspire people through the value found in cars.
In 2007, Mazda announced the “Sustainable Zoom-Zoom” long-term vision for technology development. Based on that vision, Mazda
has worked to provide both driving pleasure and outstanding environmental and safety performance.
In August 2017, Mazda announced “Sustainable Zoom-Zoom 2030,” its long-term vision for technology development that looks
ahead to the year 2030. In light of the significant changes in the global automobile industry, the new vision takes a longer-term
perspective and sets out how Mazda will make use of driving pleasure—the fundamental appeal of the automobile—to help resolve
issues facing people, the earth, and society.
Through conservation initiatives, create a sustainable future in which people and cars coexist with a
bountiful, beautiful earth
Earth
PeopleEnhance customers’ mental well-being with the satisfaction
that comes from protecting the earth and contributing to
society with a car that offers true driving pleasure
SocietyRealize cars and a society that offer safety and peace
of mind, and create a system that enriches lives by
offering unrestricted mobility to people everywhere
EarthThrough conservation initiatives, create a
sustainable future in which people and cars
coexist with a bountiful, beautiful earth
Issues and the External Environment Need for substantial reductions in CO2 emissions in order to reduce greenhouse gases, which are a primary cause of global warming
Increasingly serious air pollution in major cities around the world
Mazda’s Approach to Issue Resolution Working to reduce CO2 emissions throughout a vehicle’s life cycle
Approaching CO2 emissions reduction from a well-to-wheel perspective
Promoting the reduction of CO2 emissions to the greatest extent possible by leveraging vehicles with internal combustion engines
Increasing Corporate Value
22 MAZDA ANNUAL REPORT 2018
To address these issues and truly reduce greenhouse gases, we must work to reduce CO2 emissions throughout a vehicle’s life cycle.
Accordingly, we are promoting the reduction of CO2 emissions not just from the previous perspective, which evaluates CO2 emissions
while driving, but also from a well-to-wheel perspective, which evaluates CO2 emissions from oil extraction to product manufacture and
shipping as well. As specific objectives, in comparison with 2010 levels, we will aim to achieve reductions in corporate average well-to-
wheel CO2 emissions by 50% by 2030 and by 90% by 2050.
To achieve these objectives, we need multiple solutions that enable us to offer appropriate powertrains in consideration of each region’s
energy situation and electricity generation method.
Vehicles with internal combustion engines, which are projected to power the majority of cars worldwide well into the future (see
illustration below), will play a central role in these endeavors. We believe that Mazda needs to promote the reduction of CO2 emissions
to the greatest extent possible by leveraging vehicles with internal combustion engines.
Refinery
Power generation
Tank
Tank
Wheel
Wheel
Combustion engine
EV / PLUG-IN HEV
CO2 Emissions Reduction from Well-to-Wheel Perspective
Well-to-Wheel (From oil extraction to driving)
Oil well
Tank-to-Wheel
Aim to reduce corporate average well-to-wheel
CO2 emissions to 50% of 2010 levels by 2030
2010 2030 2050
–50%–90%
Targets
Corporate
average well-to-
wheel CO2
emissions
(g/km)
Means to Achieve Our Targets
To protect the earth, we will implement the following initiatives in order to maximize the effect of reduced greenhouse gas emissions
under real-world conditions.
1. Aspire to make the best internal combustion engine in the world
2. Combine the ideal internal combustion engine with efficient electrification technologies
3. Introduce EVs and other electric-powered technologies in regions that use clean energy to curb global warming and in regions that
implement government policies to reduce air pollution
23MAZDA ANNUAL REPORT 2018
Increasing Corporate Value
0
160
2000 2010 2020 2030 2040 2050 2035
IEA / ETP – “Energy Technology Perspective”
Internal
combustion engine
(approx. 84%)
Sale
s o
f New
Pas
seng
er C
ars
(Mill
ions
) FCEV Electricity Plug-in hybrid gasoline Plug-in hybrid diesel Diesel hybrid Gasoline hybrid CNG / LPG Diesel Gasoline
Gasoline / Diesel /CNG / LPG
Hybrids
Plug-in hybrids
Electric vehicles (approx. 11%)
Fuel cell vehicles (approx. 5%)
Society
Realize cars and a society that offer safety and peace of mind, and create a system that enriches lives by
offering unrestricted mobility to people everywhere
Issues and the External Environment Emergence of new causes of traffic accidents, especially in
developed nations
• Accidents caused by young and inexperienced drivers
• Distracted driving due to increase in the volume of
information from smartphones, etc.
• Driving errors by elderly drivers
• Dangerous driving under the effects of overwork and illness
Emergence of issues accompanying changes in the structure
of society
• Weakening / disappearance of public transport in areas
of depopulation
• Increase in numbers of elderly or disabled who have difficulty
getting around
Mazda’s Approach to Issue Resolution Continuously evolve fundamental safety technologies and
standardize them across all models
Promote standardization of i-Activsense advanced
safety technology
Mazda Co-Pilot Concept, a human-centric concept for
autonomous driving
Advancement of Mazda Connect
Next-Generation Gasoline Engine — Skyactiv-X
Skyactiv-X is an innovative internal combustion engine that combines the distinc-
tive high-revving performance of a gasoline engine with the fuel efficiency, torque,
and response of a diesel. With its proprietary combustion method called Spark
Controlled Compression Ignition (SPCCI), Skyactiv-X is set to become the world’s
first commercial gasoline engine to use compression ignition. In comparison with
the current Skyactiv-G gasoline engine, Skyactiv-X is expected to improve fuel
efficiency by 20% to 30% and increase torque by 10% up to a maximum of 30%.
It will dramatically increase both environmental performance and driving pleasure.
Skyactiv-X is an engine that stands by the earth and people while supporting the
Jinba-ittai (horse and rider as one) enjoyment that we strive to offer our customers.
Gasoline engineSkyactiv-G lineup
Mazda’s Approach to Issue Resolution
Diesel engineSkyactiv-D lineup
GasolineEngine
Next-GenEngine
DieselEngine
Fuel economy
Torque
Response
Output (expansion)
Heating
Exhaust purification
“SPCCI”Spark Controlled Compression Ignition
CI combustion
Expanding fire ball
(Air piston)
Our Skyactiv-G and Skyactiv-D engines
have been receiving high evaluations
around the world. By continuing to evolve
these engines and by introducing
Skyactiv-X, we will be able to realize an
extensive engine lineup and meet a broad
range of customer needs including
regional characteristics.
Cus
tom
er V
alue
Increasing Corporate Value
24 MAZDA ANNUAL REPORT 2018
Skyactiv-X
Means to Achieve Our Targets
1. Continuously evolve fundamental safety technologies
and standardize them across all models
• Driving position
• Pedal layout
• Visibility
• Active Driving Display
2. Promote standardization of i-Activsense advanced safety technology,
which helps drivers recognize and assess potential hazards
• Technologies to reduce accidents involving rear-end collisions, pedestrians, pedal mix-ups, and lane changes
March 2018 fiscal year: Standardize in Japan
2018 and onward: Standardize globally
• The Mazda Co-Pilot Concept centers on people and leverages automated driving technologies
2020: Commence testing
By 2025: Aim for standardization
3. Utilize connectivity technologies
Using an advanced version of Mazda Connect, we will create a new business model that enables car owners to support the mobility
needs of people in depopulated areas and those who have difficulty getting around
A natural pedal layout Pillar and side mirror shape that minimize
blind spots
Automobile Society
Automobile Society
Driver
Driver
When the driver’s condition is normal
Under normal conditions, drivers can
enjoy driving themselves while the car
constantly monitors their condition and
conducts “virtual driving,” meaning it is
ready to drive itself at any time.
When the driver cannot operate the
vehicle in a normal manner
When it is determined that the driver
cannot operate the vehicle normally,
the car overrides the driver to avoid
collisions and moves to a safe location
to stop the vehicle.
Human-Centric Autonomous Driving Concept — Mazda Co-Pilot Concept
Vehicle information
Vehicle information
Always sensing
Always sensing
Perception
Perception
Judgment
Judgment
Operation
Operation
Activates
Activates
1
2
1
Driver’s condition
Driver’s condition
Information on road conditions
Information on road conditions
Information on road
conditions
Information on road
conditions
Back-up system
Back-up system
Virtual driving
Virtual driving
Interpret
Interpret
2. Driver cannot operate car normally
Car overrides the driver, drives to a safe place and stops
1. Normal conditions
Driver drives responsibly
Mazda’s Approach to Issue Resolution
With the goal of realizing a motorized society without traffic accidents, we are striving to develop more advanced safety technologies under
the Mazda Proactive Safety philosophy.
25MAZDA ANNUAL REPORT 2018
Increasing Corporate Value
Next-Generation Skyactiv-Vehicle Architecture Platform
Mazda’s Skyactiv-Vehicle Architecture was developed with an intensified focus on
its human-centered design philosophy to maximize the human body’s inherent
ability to balance itself and to realize the ultimate connection between driver
and car.
In this way, it offers all occupants a more comfortable and less tiring ride and
enables them to respond quickly to environmental changes. As the human body
is easily able to balance itself in response to driving inputs, the new vehicle
architecture provides responsive driving and the ultimate Jinba-ittai driving feel.
To realize these advantages, the development team reviewed every aspect
of the car platform from the viewpoint of comprehensive vehicle optimization.
The resulting innovations include redesigned seats that keep the pelvis upright to
maintain the spine’s natural “S-curve,” a body with multi-directional ring structures
to transmit inputs without delay, a chassis structure with each part interacting to
smoothly control energy transfer to the sprung mass, and NVH performance
meticulously optimized based on vibration energy characteristics and the
mechanisms by which humans perceive sound.
Next-Generation Design
Since 2010, Mazda has striven to create cars that embody the dynamic
beauty of life through application of its Kodo—Soul of Motion design
philosophy. Taking a step forward, next-generation design will pursue the
expression of a “new elegance” based on Japanese aesthetic sensibilities.
Here, the word “elegance” implies a beauty that is subtle and restrained
yet rich and abundant. Within its conveyed impression of dignified tension,
next-generation design also allows people to sense a hint of warmth and
seductiveness. Japanese aesthetics call for a delicate sense of balance
rather than a show of ostentation. Next-generation design aims to breathe
life into cars with a “less is more” aesthetic. Eliminating all but the truly essential elements creates precious blank spaces
surrounding simple forms. To these, Mazda applies effective use of light and shadow to create subtle details and achieve the
desired result.
People
Enhance customers’ mental well-being with the satisfaction that comes from protecting the earth and
contributing to society with a car that offers true driving pleasure
Issues and the External Environment
People today enjoy a more affluent lifestyle thanks to mechanization and automation. However, stress levels have also been
rising due to a lack of exercise and opportunities for direct social contact.
Mazda’s Approach to Issue Resolution
We aim to have even more people experience the driving pleasure of our cars and to enrich customers’ lifestyles by offering them
exhilaration and a sense of accomplishment through driving.
We will further enhance the Jinba-ittai experience, which unlocks people’s potential and revitalizes them mentally and physically,
as well as designs that uplift the feelings of the people who see them.
Mazda’s Approach to Issue Resolution
Next-Generation Design Model—Mazda Vision Coupe
Seat support Maintain an S-shaped curve in the spine
Keep pelvis upright
Center of gravity of the rib cage
Upper pelvis
Thigh Pelvis
Increasing Corporate Value
26 MAZDA ANNUAL REPORT 2018
Seat that can maintain the “S-curve” of the spine
Plan for Introducing Next-Generation Technologies
Targeting the realization of “Sustainable Zoom-Zoom 2030,” we will introduce next-generation technologies from 2019 with the
objective of helping to resolve the issues facing the earth, society, and people and of achieving sustainable growth.
In regard to the earth, Mazda is evolving the technology of internal combustion engines. At the same time, Mazda intends to leverage
its highly efficient combustion engines by commercializing a mild hybrid system that is lightweight, small, and low cost, in addition to
launching an EV which is necessary for meeting structural requirements, such as ZEV* standards in the U.S. state of California. Following
the introduction of these vehicles, the Company plans to add plug-in hybrids to its lineup.
For society, Mazda is working to continuously improve the performance of its advanced safety technologies and to make these
technologies standard equipment for its vehicles. In addition, the Company is promoting development geared toward the introduction
and the standardization of the Mazda Co-Pilot Concept, a human-centric autonomous driving concept. Mazda is also continuously
making advancements with Mazda Connect, which offers a pleasant driving experience and a safe driving environment through
connected technologies. In doing so, Mazda will deliver high-quality, high-performance connectivity to drivers going forward.
In regard to people, we will successively introduce Skyactiv-Vehicle Architecture, which fully leverages inherent human abilities and
realizes the ultimate connection between driver and car, as well as next-generation designs that further enhance Kodo—Soul of
Motion design.
* A zero emission vehicle (ZEV) refers to an electric or fuel cell vehicle that does not emit any exhaust gases. California’s ZEV regulations stipulate that for automakers that sell vehicles
in the state, a certain percentage of those vehicles must be ZEV vehicles.
A Compact Hatchback that Leads the Way for Mazda’s Next-Generation Products
— Mazda Kai ConceptThe Mazda Kai Concept made its world premiere at the Tokyo Motor Show in 2017. This concept for a compact hatchback
reflects the pursuit of representing the ideal vehicle powered by an internal combustion engine and skillfully blends
next-generation technologies with next-generation design.
The powertrain selected for the Mazda Kai Concept is the next-generation Skyactiv-X engine. The concept also utilizes
Skyactiv-Vehicle Architecture. Combined with the Skyactiv-X engine, it delivers highly refined driving dynamics in every respect,
from the performance feel and comfort to the quietness of the ride. The design features deeply honed beauty created by shaving
away all unnecessary elements to produce a hatchback that presents itself as a strong, solid mass.
Mazda Kai Concept
27MAZDA ANNUAL REPORT 2018
Increasing Corporate Value
MONOTSUKURI INNOVATION
We are realizing high levels of diversity, which enhances the competitive edge of our products, and commonality, which boosts the efficiency of mass production, through efforts in Monotsukuri Innovation.
Looking five to 10 years into the future, we have implemented Monotsukuri Innovation for efficiently developing and manufacturing
products. Common development methods and manufacturing processes are made possible by using bundled product planning for
models to be introduced in the future, spanning market segments and model classes.
Optimized structures of each function are shared across all car lines and laterally spread to each car line based on the bundled
product planning. A flexible production system is used to produce products engineered based on a common architecture concept in
a highly efficient and flexible way. We are aiming to raise operational efficiency through building a flexible production process that can
handle changes in volumes and can quickly introduce new models with a minimum of investment.
Through Monotsukuri Innovation, our new-generation products since the CX-5 and Skyactiv Technology have achieved improved
efficiency in terms of both product development and manufacturing facility investment as well as significant improvements in vehicle
costs. Through design based on common architecture under Monotsukuri Innovation, Mazda is able to promptly apply the latest
technologies and designs to all its products. Design based on common architecture also allows Mazda to pursue scale merits for its
entire lineup, thereby enabling the Company to develop and produce products with high base performance at low costs. Furthermore,
in next-generation technology development, we are working to enhance the efficiency of development processes through bundled
planning and computer modeling-based development.
Cars are being called on to provide increasingly advanced and diverse functions, while at the same time vehicle architecture and control
systems are becoming more complex. To continue to rapidly develop complex systems with limited resources, the use of computer
modeling-based development, which realizes efficient development, is extremely important.
Computer modeling-based development is an efficient and optimal development method in which we create models and conduct
thorough computer simulations involving various elements of the development process, including vehicle types, control systems, drivers
and passengers, and driving environments. By carrying out development through simulations from design to vehicle evaluation, we are
able to reduce the number of prototype parts and actual unit verification, thereby enabling us to develop complex, highly sophisticated
new products with minimum resources while also ensuring quality.
In the development of Skyactiv Technology, which started in 2006, we pursued development that fully leveraged computer modeling
with the aim of realizing the world’s best fuel economy and driving performance. We completely revised our control systems from square
one and have developed combustion systems that achieve similar combustion characteristics regardless of engine displacement. With
Skyactiv Technology, we have been able to realize engines, transmissions, and vehicle bodies with outstanding driving and fuel economy
performance, including Skyactiv-G, which boasts the world’s best high compression ratio. Going forward, through computer modeling-
based development, we will further advance Skyactiv Technology and provide more customers with driving pleasure and outstanding
environmental and safety performance.
Mazda is fully leveraging the effects of bundled planning under Monotsukuri Innovation to establish a flexible production structure at its
production sites around the world. This structure makes it possible for operations to complement each other, within a site or between
sites, by changing the production volumes of passenger vehicles and crossover vehicles at a production site, or by flexibly changing the
production volume of the same model between production sites in accordance with demand and other conditions.
At our plant in Thailand, we commenced
production of the Mazda CX-3 in October 2015,
and at the Hofu Plant we started production of the
CX-3 in December 2016 and the all-new CX-5 in
October 2017. In August 2017, Mazda increased
the production capacity for crossover vehicles at its
Hiroshima Plant. Moving forward, we will address
increasing demand for crossover vehicles and
support stable sales volume growth.
Outline of Global Swing Production
Passenger vehicles
Vertical Swing
Horizontal Swing Passenger vehicles Passenger vehicles
Site A Site CSite B
Crossovers Crossovers Crossovers
Maximization of Production Efficiency
Computer Modeling-Based Development
Increasing Corporate Value
28 MAZDA ANNUAL REPORT 2018
MAZDA CSR
Basic ApproachMazda aims to achieve its Corporate Vision through the actions of each individual, based on the Mazda Way. While striving to meet
the requests and expectations of all of Mazda’s stakeholders, all employees pursue CSR (Corporate Social Responsibility) initiatives in the
course of their daily business activities, thereby striving to the sustainable development of both society and the Company itself.
Areas of CSR InitiativesReferencing the Charter of Corporate Behavior issued by the Japan Business Federation (Nippon Keidanren), etc., Mazda classifies and
evaluates its CSR initiatives. The areas of CSR initiatives are periodically reviewed and revised in light of issues in the business activities of
the automotive industry and Mazda, as well as social issues to which stakeholders attach particular importance. The most recent review
was made in July 2016, by which the Company defined the following as the key areas of its CSR initiatives: Customer Satisfaction,
Quality, Safety, Environment, Respect for People, and Social Contributions.
CSR Promotion OrganizationEach department carries out its operations
based on goals and plans formulated with an
understanding of the policies and guidelines
determined by the CSR Management Strategy
Committee, which the president chairs, and in
cooperation with other Group companies.
From the March 2016 fiscal year, the Board of
Directors held discussions on issues concerning
sustainability.
For specific Mazda CSR activities, please see Mazda Sustainability Report.
http://www.mazda.com/en/csr/report/download/
Areas of CSR Initiatives
Customer SatisfactionProviding a Mazda brand experience that exceeds customer expectations• Commitment to customers• Sales and customer service, etc.
Quality
Offering products and services that please our customers• Establishing stable product quality• Achieving quality that exceeds customer expectations• Cultivating human resources capable of thinking and acting for the happiness of customers
SafetyPromoting safety initiatives to achieve a safe and accident-free automotive society• Safety initiatives based on three viewpoints; vehicles, people, and roads and infrastructure
EnvironmentReducing environmental impact throughout the entire vehicle life cycle• Environmental management, efforts regarding product and technology development, efforts regarding manufacturing
and logistics, recycling, biodiversity, communication, etc.
Respect for PeopleDeveloping human resources, who are the foundations of the Company and society, and respecting for human rights• Initiatives with employees (including occupational safety and health)• Respect for human rights, etc.
Social ContributionsContributing to local communities as a good corporate citizen• Activities based on the three pillars (environment and safety performance, human resources development, and
community contributions), etc.
Mazda Group companies in Japan Mazda Group companies overseas
Company Departments and Sections
Set operational targets and plans for the medium and long term, and for each fiscal year, and implement these targets and plans
Cus
tom
er S
atis
fact
ion
Qua
lity
Safe
ty
Envi
ronm
ent
Res
pec
t fo
r Pe
op
le
Soci
al C
ont
rib
utio
ns
CSR Management Strategy Committee
Meetings: Twice annuallyChairperson: Representative Director, President and CEOVice Chairperson: Executive Officer in charge of CSR and environmental affairsMembers: Members of the Executive Committee
Organization
Secretariat(CSR & Environment Department)
CSR Strategy Core Team
Meetings: Held as requiredMembers: Working members of primary depart-ments involved in carrying out CSR initiatives
29MAZDA ANNUAL REPORT 2018
Foundations Underpinning Sustainable Growth
Review and Identification of Key CSR Issues (Materiality)Mazda has been implementing a four-phase process to identify the key CSR issues (materiality), and reviewing the social issues that the
Company should address, starting in FY March 2014. In identifying materiality, Mazda reflects the external opinions of experts and vari-
ous other stakeholders, while taking into account opinions both from management and the relevant divisions.
During the materiality identifying process, Mazda has also referenced the Sustainable Development Goals (SDGs) adopted by the United
Nations. In the future, Mazda will continue to review materiality, while further clarifying the relationship between SDGs and materiality.
Promoting Initiatives Based on the SDGsThe Mazda Group is promoting various initiatives that contribute to realizing the
Sustainable Development Goals (SDGs), which were adopted by the United Nations.
In the March 2018 fiscal year, the CSR Management Strategy Committee worked to
enhance the SDG-related information available to the Company’s management and
to raise awareness of the SDGs among employees through level-specific training.
Mazda’s initiatives that contribute to achieving the 17 goals of the SDGs are introduced
in Mazda Sustainability Report detailed version.
CHECK External Evaluations of CSR (As of Aug. 2018)
Mazda identifies key external ratings and evaluations both from within Japan and overseas. By analyzing the results, Mazda evaluates its own initia-tives. Mazda continuously makes active efforts to disclose information by responding to both domestic and global surveys and evaluations, such as those by socially responsible investment (SRI) and environment, social, and governance (ESG) rating organizations.
Inclusion in the Dow Jones Sustainability Index (DJSI)* World Index and Asia Pacific Index (Newly selected in September 2017). ESG index developed by the S&P Dow Jones Indices and RobecoSAM's cooperation.
*Mazda was awarded “Silver Class” in RobecoSAM Sustainability Award 2018, as an excellent company in Automobile sector.
Inclusion in the FTSE4Good Index series since March 2011. ESG indices developed by the FTSE Russell, a fully owned subsidiary of the London Stock Exchange.
Inclusion in the FTSE Blossom Japan Index (Selected since the index was established in July 2017).
Inclusion in the MSCI ESG Leaders Indexes since June 2015. ESG indices developed by MSCI (Morgan Stanley Capital International).
Inclusion in the MSCI Japan ESG Select Leaders Index (Selected since the index was established in July 2017).
Inclusion in the Ethibel EXCELLENCE Investment Register since October 2013. Forum ETHIBEL is a Belgium-based non-profit organization that promotes socially responsible investment (SRI) and CSR in Europe.
Inclusion in the Morningstar Socially Responsible Investment Index (MS-SRI) since January 2008. The first SRI index developed in Japan.
In the CDP (formerly Carbon Disclosure Project) Climate Change and Water Report 2017, Mazda’s score was A- (2nd level score). On behalf of institutional investors, the CDP organization conducts research and discloses information and evaluation result about climate change, water, and others.
*1 Expectation to Mazda Group and the automotive industry*2 Risk and opportunity for Mazda Group
Where significance of Mazda Group impact is extremely high Where significance of Mazda Group impact is high
Category Items Category Items
I
Indirect Economic Impacts
III
Market Presence
Energy Materials
Water Source in Community Supplier Environmental Assessment
Emissions Supplier Assessment for Labor Practices
Effluents and Waste Social Community
Products and Services Supplier Assessment for Impacts on Society
Occupational Health and Safety Product and Service Labeling
Diversity and Equal Opportunity Compliance of Product Area
Customer Health and Safety
IV
Purchasing Practices
II
Economic Performance Compliance of Environmental Area
Transport Labor / Management Relations
Employment Equal Remuneration for Women and Men
Training and Education Forced or Compulsory Labor
Assessment
Anti-Corruption
Compliance of Social Area
Marketing Communications
Customer Privacy
Category III Category I
Category IV Category II
High Extremely high
Significance of Mazda Group impacts*2
Influ
ence
on
stak
eho
lder
s*1
Hig
hEx
trem
ely
high
Mazda Group’s Key Issues of CSR (Materiality) (as of Aug. 2018)
Foundations Underpinning Sustainable Growth
30 MAZDA ANNUAL REPORT 2018
BUSINESS MANAGEMENT SYSTEM
Overview of the Corporate Governance Structure
Format Company with Audit & Supervisory Board
Number of directors 10
Number of outside directors 2
Term of directors 2 years
Incentives for directors Short-term incentives: Earnings-based compensationMedium-to-long-term incentives: Compensation in the form of stock options
Number of Audit & Supervisory Board members 5
Number of outside Audit & Supervisory Board members 3
Independent officers (filed with Tokyo Stock Exchange) 5 (2 outside directors, 3 outside auditors)
Procedures in appointing and determining remuneration of the officers Officer Lineup Advisory CommitteeOfficer Remuneration Advisory Committee
Accounting auditor KPMG AZSA LLC
Adoption of executive officer system Yes
Corporate GovernanceMazda is enhancing its corporate governance by working to increase management transparency and expedite decision making. The Company
respects the intent of the Corporate Governance Code set by the Tokyo Stock Exchange (published on June 1, 2015) and shall implement all
of its principles.
While working to build a good relationship with its stakeholders, including shareholders, customers, suppliers, the local community, and its
employees, the Company shall strive to sustain growth and enhance its corporate value over the medium and long terms through transparent, fair,
prompt, and decisive decision making and to continue to enhance its corporate governance.
CHECK Efforts to Improve Corporate Governance
Initiatives to Increase the Effectiveness of the Board of Directors In the March 2018 fiscal year, the Company carried out its third analysis and evaluation of the Board of Directors’ effectiveness. In terms of improve-ments made based on the previous evaluation, efforts were made to further enhance the provision of information to outside corporate officers and to strengthen progress reports and debate on important matters at Board meetings. It was found that, as a result, the outside corporate officers gained a better understanding of the Company’s operations and more constructive discussions took place at Board meetings at appropriate times. In addition, discussions are being held on making improvements in regard to new issues that were identified through this year’s evaluation and analysis.
Approach to Nominating and Appointing Outside Directors and Outside Audit & Supervisory Board MembersWhen nominating and appointing officers, under the basic premise that they are healthy both physically and mentally, the Company shall consider whether they have the proper attitude to fulfill the mandate of shareholders, customers, and other stakeholders, high ethical standards, the ability to take action, leadership qualities, and the experience and ability to carry out their duties as well as their professional and personal achievements. Candidates for director must have exceptional character, insight, ability, and a wealth of experience. The overall structure and balance of the Board must also be considered. The Company shall confirm that, in addition to the above, candidates for outside director and outside Audit & Supervisory Board member meet the Company’s requirements for independence and have the time and energy necessary to properly fulfill their roles and responsibilities.
Advancing the Promotion of Women to Management PositionsTo further the promotion of women to management positions, the Company has set a target of increasing the number of female middle managers to three times the figure as of March 31, 2014 by 2020. The Human Resources Development Committee is also formulating individual training programs for female candidates for middle manager. Mazda also supports and participates in the “Action Plans on Promotion of Women to Managerial and Board Position” by the Japan Business Federation (Nippon Keidanren). For details on Mazda’s efforts with regard to respect and diversity, please refer to the Company’s website.
http://www2.mazda.com/en/csr/csr_vision/employee/pdf/diversity.pdf
Please refer to the Corporate Governance Report for basic philosophy, policies, and details on Mazda’s initiatives regarding the Corporate Governance Code.
http://www.mazda.com/en/investors/library/governance/
31MAZDA ANNUAL REPORT 2018
Foundations Underpinning Sustainable Growth
1 Board of DirectorsMazda’s Board of Directors decides on the execution of important
Company operations and oversees the execution of operations by
individual directors. The Board is made up of 10 directors, two of
whom are highly independent outside directors. The outside directors
are expected to help strengthen the auditing functions of the Board
of Directors and further boost the transparency of management by
offering advice on Mazda’s management activities based on their
knowledge, experience, and insights, and by taking part in the
decision-making process.
2 Audit & Supervisory BoardThe Company’s Audit & Supervisory Board has five members,
including two full-time and three outside Audit & Supervisory Board
members. Audit & Supervisory Board members audit the directors
in the performance of their duties as per an annual audit plan
formulated by the Audit & Supervisory Board. The Audit &
Supervisory Board possesses knowledge based on the unique
expertise of its members, and each outside Audit & Supervisory Board
member has a substantial amount of knowledge related to finance
and accounting. Aside from attendance at the Board of Directors’
meetings, the Audit & Supervisory Board members attend
management meetings, etc.
3 Executive OfficersThe Company has introduced an executive officer system. By separating
execution and management, the effectiveness of the oversight of the
Board of Directors is enhanced, and decision making is speeded up
through expanded debate by the Board of Directors and by delegating
authority to executive officers. In this way, the Company is working to
further managerial efficiency.
4 Internal Auditing DepartmentIn an effort to contribute to sound and efficient management, the
internal auditing department audits the appropriateness of the busi-
ness activities of the Company or its Group companies. It also audits
the appropriateness and effectiveness of internal control.
5 Accounting AuditorAccounting audits are conducted by KPMG AZSA LLC, with whom
the Company has concluded an audit contract. The certified public
accountants who conducted the Company’s accounting audits have
been working on the Company’s audits for less than seven years.
Those assisting with the Company’s accounting audits include 14 cer-
tified public accountants, two public accountants with U.S. certifica-
tion, and 16 others, three of whom have passed the certified public
accountant examination.
6 Officer Lineup Advisory Committee and Officer Remuneration Advisory Committee
For nominating and appointing candidates for director, Audit &
Supervisory Board member, or executive officer, the Company has
established an Officer Lineup Advisory Committee to discuss the
makeup of the officer lineup and policies for the development and
selection of candidates.
For determining the remuneration of directors and executive offi-
cers, the Company has established an Officer Remuneration Advisory
Committee to discuss remuneration policy and a structure and pro-
cess based on the policy to enable the Company’s continued growth
and to enhance its corporate value over the medium and long terms.
The Officer Lineup Advisory Committee consists of eight inside
directors and two outside directors, and the Officer Remuneration
Advisory Committee comprises three inside directors and two outside
directors. Both committees are advisory bodies to the president and
are chaired by an outside director.
Corporate Governance Framework
General Meeting of Shareholders
2 Audit & Supervisory Board, Audit & Supervisory
Board Members(Five, of whom three are outside Audit &
Supervisory Board members)
Selection / Dismissal
Reporting, Cooperation
Reporting
ReportingCooperation
Audit
Supervise
Audit
SuperviseConsultation
Selection / Dismissal Selection / Dismissal
3 Executive Officers
Division General Managers, etc. Group Companies
Each Committee*
Department / Group Managers
All Employees
Representative Directors
Executive Committee and Other Advisory
Bodies
6 Officer Lineup Advisory Committee
6 Officer Remuneration Advisory Committee
1 Board of Directors, Directors(Ten corporate directors, of whom
two are outside directors)
5 Accounting Auditor
* Company-wide Safety and Health Committee Meeting, Quality Committee Meeting, Risk Compliance Committee, Human Rights Committee, Security and Export Control Committee, etc.
4 Internal Auditing Department
Foundations Underpinning Sustainable Growth
32 MAZDA ANNUAL REPORT 2018
Efforts to Increase Transparency and Fairness of the Process for Nominating and Appointing DirectorsIn order to enhance the transparency, fairness, and objectivity of the
process for nominating and appointing officers (candidates for direc-
tor, Audit & Supervisory Board member, or executive officer), the
Company has established an Officer Lineup Advisory Committee
made up of all directors and with an outside director as chair to serve
as an advisory body to the president and offer advice on the makeup
of the officer lineup and on policies on the training and selection of
candidates. Based on the committee’s advice, the president submits
to the Board proposals on the nomination and appointment of cor-
porate officers.
When nominating and appointing officers, under the basic premise
that they are healthy both physically and mentally, the Company shall
consider whether they have the proper attitude to fulfill the mandate
of shareholders, customers, and other stakeholders, high ethical stan-
dards, the ability to take action, leadership qualities, and the experi-
ence and ability to carry out their duties as well as their professional
and personal achievements. Candidates for director must have
exceptional character, insight, ability, and a wealth of experience. The
overall structure and balance of the Board must also be considered.
The Company shall confirm that, in addition to the above,
candidates for outside director and outside Audit & Supervisory
Board member meet the Company’s requirements for independence
and have the time and energy necessary to properly fulfill their roles
and responsibilities.
The reasons for the appointment of the directors and Audit &
Supervisory Board members are described in the Notice of the
Ordinary General Meeting of Shareholders.
Policy on the Training of Directors and Audit & Supervisory Board MembersWhen directors or Audit & Supervisory Board members assume their
posts, the Company shall hold training for them to ensure that they
can fulfill their respective roles and responsibilities. Even after they
assume their posts, the Company shall provide them with opportuni-
ties to undergo training in corporate governance, internal control,
compliance, and other areas, as necessary.
In addition to the above, outside directors and outside Audit &
Supervisory Board members shall be given opportunities to learn
more about the nature and status of the Company’s business, such as
tours of dealerships and plants, participation in events, and meetings
with executive officers.
Outside Directors and Outside Audit & Supervisory Board Members
Outside director
Professional background
Reasons for assignmentAttendance at Board of Directors’ meetings (Number of meetings
attended / Total number of meetings)
Ichiro Sakai
Attorney at law
Mr. Sakai served as a prosecutor and attorney and has extensive experience in and knowledge of the legal profession. He offers valuable advice and suggestions based on this experience and knowledge to further strengthen the Board’s supervisory function, and further enhance management transparency.
18/18
Kazuaki Jono
Local government
Mr. Jono has held important posts with Hiroshima Prefecture, including vice governor, and has extensive experience and knowledge acquired in the administration of a local government. He offers valuable advice and suggestions based on this experience and knowledge to further strengthen the Board’s supervisory function, and further enhance management transparency.
18/18
Outside Audit & Supervisory
Board member
Professional background
Reasons for assignment
Attendance at meetings(Number of meetings attended /
Total number of meetings)
Board of Directors’ meetings
Audit & Supervisory
Board meetings
TakaoHotta
Unrelated company
Mr. Hotta held key posts at the Ministry of Finance and has experience in management at a company in a field different from that of the Company. Because of his great knowl-edge of finance and accounting and his considerable experience and insight, Mr. Hotta is an appropriate person to conduct audits from an outside perspective.
18/18 17/17
KunihikoTamano
Unrelated company
Mr. Tamano served as managing executive officer and assistant to the chief financial officer at a trading company. Because he has worked in risk management and the man-agement of a corporate group and has great knowledge of finance and accounting as well as extensive experience and insight into the management of an international company, Mr. Tamano is an appropriate person to conduct audits from an outside perspective.
15/15 13/13
Akira Kitamura
Unrelated company
Mr. Kitamura has held key posts at a financial institution, including representative director & senior managing executive officer and chairman of the board and chief executive officer (representative director). Because of his great knowledge of finance and accounting as well as extensive experience and insight into the management of a company, Mr. Kitamura is an appropriate person to conduct audits from an outside perspective.
(Appointed in June 2018)
*1 The attendance at Board of Directors’ meetings and Audit & Supervisory Board meetings in the March 2018 fiscal year is shown.*2 Based on its criteria for independence, the Company has determined that the Company’s outside directors and outside Audit & Supervisory Board members have sufficient
independence such that no risk of conflict of interest with general shareholders will result and has notified the Tokyo Stock Exchange that all five individuals are designated as independent directors. Please refer to the Corporate Governance Report for the Company’s criteria for the independence of an outside officer.
33MAZDA ANNUAL REPORT 2018
Foundations Underpinning Sustainable Growth
Method of analysis and evaluationBased on a survey prepared by the Board’s secretariat, all of the directors and members of the Audit & Supervisory Board evaluated the Board’s effectiveness. After the results were compiled by the secretariat, an analysis of the current situation was shared at a Board meeting, and the ideal to be pursued and improvements were discussed.
Contents of analysis and evaluationThe survey primarily covered debate on the composition of the Board of Directors, the business strategy, debate on compliance and internal control, the provision of information (the amount of information, materials, explanations, and support for outside directors), and involvement in the debate.
Overview of the resultsIt was found that members of the Board of Directors are properly involved in determining the Company’s business strategy and share an understanding of its content, that the outside directors express their opinions from an independent perspective after gaining an understanding of the Company’s situation by receiving explanations of resolutions in advance and other forms of support, and that the oversight function of the execution of operations has been ensured. Based on the previous survey (March 2017 fiscal year), efforts were made to further enhance the provision of information to out-side corporate officers and to strengthen progress reports and debate on important matters at Board meetings. It was found that, as a result, the outside corporate officers gained a better understanding of the Company’s operations and more constructive discussions took place at Board meetings at appropriate times. Meanwhile, the Company recognized the need for further improvements, including strengthened monitoring of the business strategy and other important matters, enhanced debate on risks and profitability, and continued debate on the diversity of Board members. The Company will analyze and evaluate the Board’s effectiveness annually and continue to make improvements in order to enhance corporate value over the medium and long term.
Supporting System for Outside Directors and/or Audit & Supervisory Board MembersThe Company provides explanations of matters to be brought before
the Board of Directors as necessary so that outside officers can freely
state their opinions at Board meetings and so that outside directors
can easily participate in decision making. The Company also arranges
for outside officers to interview executive officers and provides
opportunities for them to inspect facilities and participate in events
both inside and outside the Company.
Full-time Audit & Supervisory Board members offer observations
based on information they have acquired or opinions they have
formed through their attendance at important internal meetings
or through their audit activities. The departments concerned work
together to provide information based on the opinions of the outside
officers and to support them.
Efforts to Increase Transparency and Fairness of the Process for Determining Compensation of DirectorsBasic Policy on Director CompensationIn order to further enhance the transparency, fairness, and objectivity of
the process for determining the remuneration of directors and execu-
tive officers, the Company has established an Officer Remuneration
Advisory Committee made up of representative and outside directors
and with an outside director to serve as chair of the meetings.
Remuneration policy and a structure and process based on the policy
will be decided, taking into account the advice of the committee in
order to enable the Company’s continued growth and enhancement
of its corporate value over the medium and long terms.
The remuneration of inside directors and executive officers consists
of 1) a fixed amount of basic remuneration commensurate with their
responsibilities, 2) performance-based remuneration determined at
the end of the fiscal year in accordance with a designated standard
and process after evaluating how much has been achieved toward
personal goals set based on an annual business plan formulated
based on the medium-term business plan, and 3) compensation in
the form of stock options under a system introduced after approval of
a resolution at the 150th Ordinary General Meeting of Shareholders
on June 28, 2016, in order to enhance the desire to contribute to
enhancing corporate value over the medium and long terms and to
share the benefits with shareholders.
Considering their status independent from the execution of
operations, outside directors shall receive a fixed amount of basic
remuneration only.
By resolution of the 141st Ordinary General Meeting of
Shareholders held on June 26, 2007, the annual compensation for
directors is to be payable within the limit of ¥1.2 billion.
March 2018 Fiscal YearCategory People Amount (Millions of yen)
Directors 11 677
Audit & Supervisory Board members 7 109
Total (of which, outside auditors) 18 (6) 786 (65)
* The above number of persons includes one director and two Audit & Supervisory Board
members who retired at the conclusion of the 151st Ordinary General Meeting of
Shareholders held on June 28, 2017.
Basic Policy on Corporate Audit CompensationThe corporate audit compensation paid to the Company’s certified
public accountants is decided by agreement with the Audit & Supervisory
Board. Based on audit duration estimates, which are based on the audit
plan for the next fiscal period, comprehensive consideration is given to
whether the appropriate business conduct of the certified public accoun-
tants and others was to the ensured level.
March 2018 Fiscal Year
CategoryCompensation based on audit certification work
(Millions of yen)
Compensation based on non-auditing work (Millions of yen)
Mazda Motor Corporation 221 7
Consolidated subsidiaries 72 3
Total 293 10
Furthermore, as another important detail concerning remunera-
tion, the Company and its consolidated subsidiaries entrust auditing
certification work and non-auditing work to offices that are affiliated
closely with KPMG and which belong to the same network as the
Company’s certified public accountants. In the March 2018 fiscal year,
the total amount of compensation paid by the Company and its con-
solidated subsidiaries was ¥539 million.
Analysis and Evaluation of the Board’s EffectivenessIn order to steadily advance measures for the further enhancement of
its efficiency, the Company’s Board of Directors analyzed and evalu-
ated the meetings conducted in the March 2018 fiscal year. The
method and results are outlined below.
Foundations Underpinning Sustainable Growth
34 MAZDA ANNUAL REPORT 2018
Cooperation Among Audit & Supervisory Board Members, Accounting Auditors, and the Internal Auditing DepartmentThe Audit & Supervisory Board members, accounting auditors,
and internal auditing department regularly hold joint meetings
and cooperate with each other.
The Audit & Supervisory Board members and the Audit &
Supervisory Board regularly meet with the accounting auditors and
hear explanations of their audit plan, audit issues, and results. The
Audit & Supervisory Board members also provide necessary informa-
tion on their audit plan and the status and results of audits. In this
way, information is exchanged in both directions, and the Company is
working to strengthen this close cooperation. Also, some audits, such
as inventory and the inspection of securities, are conducted jointly by
the Audit & Supervisory Board members and the accounting auditors.
The Audit & Supervisory Board members and the Audit &
Supervisory Board regularly meet with the internal auditing depart-
ment and the departments in charge of promoting internal and finan-
cial control. The Audit & Supervisory Board members get reports from
the internal auditing department on the plans for and results of inter-
nal audits of the Company and its Group companies. They also get
reports from the departments in charge of promoting internal and
financial control on plans for efforts to enhance internal and financial
control in the Company and its Group companies and the status of
these efforts. In addition, the Audit & Supervisory Board members
provide information acquired in the process of conducting their
audits or convey requests from their perspective as Audit & Supervisory
Board members, making for a two-way exchange of information. The
internal auditing department also attends the Group auditor briefings
conducted by the Audit & Supervisory Board members.
Dialogue with Shareholders and InvestorsFor continued growth and enhancement of corporate value over the
medium and long terms, the Company shall promote investor rela-
tions through the timely and appropriate disclosure of information
to shareholders and investors and through constructive dialogue.
The officer who oversees finance shall have overall responsibility
for dialogue with shareholders, and the officer in charge of finance
and the financial planning department (investor relations depart-
ment) shall be in charge. In order to enhance dialogue, they shall
cooperate with departments in charge, including the Corporate
Planning & Development Division and the Corporate Services
Division, and create a framework for the proper provision of information.
In addition to general shareholders’ meetings, the Company holds
meetings with shareholders and investors to explain its quarterly busi-
ness results, management, and other business activities. Mazda is
working to increase opportunities for dialogue in such ways as hold-
ing business briefings for institutional investors, individual investors,
and domestic and overseas securities analysts.
Mazda’s website provides information including the schedule for
general shareholders’ meetings and financial results announcements,
performance / financial data, notice of the general meeting of share-
holders (business report), shareholders’ reports (in Japanese only),
summary of financial results, briefing materials for the financial
results, asset securities reports (in Japanese only), annual reports, and
Corporate Governance Report as the Company shall endeavor to dis-
close information impartially and with a high degree of transparency.
Opinions from shareholders will be relayed to the Board of
Directors or the management team as necessary by the officer
in charge of finances. In dialogues with shareholders, insider
information (undisclosed material facts) shall be handled appropriately
in accordance with laws and regulations and internal regulations.
Basic Strategy for Capital PolicyIn order to enhance corporate value over the medium and long terms
and build a solid financial foundation for stable, continued growth,
the Company shall endeavor to reduce its interest-bearing debt and
increase its equity capital.
The Company shall also endeavor to use its management resources
effectively and enhance its capital efficiency.
With regard to shareholder returns, the Company shall endeavor to
strengthen its financial foundation for a higher dividend payout ratio,
with the payment of dividends based on performance as its basis.
Cross-ShareholdingsTaking into overall consideration the business strategy, the necessity
to business activities such as maintaining and strengthening business
dealings, and the economic rationality of cross-shareholdings, the
Company shall have cross-shareholdings when mutual cooperation
between companies will lead to the enhancement of corporate value
over the medium and long terms.
Every year at a Board of Directors’ meeting, the Company shall
verify the economic rationality of its cross-shareholdings and the out-
look over the medium and long terms based on the returns on and
risks of its principal cross-shareholdings.
Initiatives to Invigorate General Shareholders’ Meetings and Ensure the Smooth Exercise of Voting Rights
Date for general shareholders’ meetingsGeneral shareholders’ meetings are held on dates that avoid concentra-tions of other companies’ general meetings.
Exercise of voting rightsTo improve convenience, voting by electromagnetic methods was intro-duced from the general shareholders’ meeting held in June 2004.
Environment for exercise of voting rights for institutional investorsMazda has participated in the electronic voting platform operated by ICJ Co., Ltd., for the exercise of voting rights by institutional investors from the general shareholders’ meeting held in June 2008.
English convocation noticeAn English version of the convocation notice is prepared as a reference for the exercise of voting rights.
OthersThe convocation notice is mailed early and disclosed on the corporate website prior to mailing. For the general shareholders’ meeting held in June 2018, we introduced a service that enables shareholders to view convocation notices and related information, etc., and to access a website to exercise their voting rights on smartphones.English: http://www.mazda.com/en/investors/stockinfo/meeting/Japanese: http://www.mazda.com/ja/investors/stockinfo/meeting/
35MAZDA ANNUAL REPORT 2018
Foundations Underpinning Sustainable Growth
March 2018 fiscal year, the committee assessed the response to
identified risks in each Company division. Based on the results of this
assessment, the committee has identified key issues shared across the
Group and is working to address these issues. The committee also
periodically reports its initiatives to the Board of Directors.
Moreover, to prevent suspension of its businesses from causing a
serious impact on society, Mazda has been developing measures to
be prepared for possible future large-scale earthquakes, such as the
expected Nankai Trough Earthquake.
Response to Accidents and Other EmergenciesMazda has been systematically undertaking preparatory measures for
major earthquakes since the March 2004 fiscal year. Examples of such
“hardware” and “software” measures include quake-proofing buildings
and facilities and raising embankments, as well as maintaining
emergency-contact networks, organizing self-disaster defense teams,
developing response manuals, selecting tsunami evacuation areas,
and carrying out evacuation drills. Moreover, disaster drills are held
annually both jointly with the fire authorities and solely by Mazda’s self-
disaster-defense teams to confirm initial response to an emergency,
based on lessons learned from the Great East Japan Earthquake and
the earthquakes that occurred in Kumamoto and Tottori prefectures.
In the March 2018 fiscal year, Mazda introduced a trial system in
certain divisions to automatically confirm employees’ safety in the
event of a large-scale disaster. Starting from the March 2019 fiscal
year, Mazda intends to introduce this system Company-wide and,
in the future, extend this system to cover overseas locations as well.
Steady efforts to enhance both the “hardware” and “software”
aspects of emergency readiness will continue in preparation for the
expected Nankai Trough Earthquake or other large earthquakes and
tsunami associated therewith. Mazda also supports local communi-
ties’ disaster prevention activities through the dispatching of fire
engines and other means.
Internal ControlsMazda has established the Mazda Corporate Ethics Code of Conduct,
which states action guidelines for employees, the Finance Control
Guideline for global financial control, and other guidelines. Based on
these guidelines, each department develops rules, procedures, manu-
als, etc., to promote establishment of internal control.
For Group companies, cooperative systems have been established
in accordance with the affiliate administration rules.
The responsible department at Mazda supports training and system
improvement for each Group company.
Risk ManagementMazda makes continuous efforts to identify and reduce various inter-
nal and external risks in accordance with the Basic Policy on Risk
Management, Risk Management Regulations, and other related inter-
nal regulations, so as to ensure continuous and stable progress of
business activities. Among the risks identified, considering the level of
importance, individual business risks are managed by the department
in charge of that business area, while Company-wide risks are han-
dled by departments that carry out business on a Company-wide
basis. These departments manage the risks appropriately, following
the PDCA cycle.
In the event of an emergency, such as a natural disaster or situation
that creates serious managerial consequences, Mazda takes appropri-
ate measures in reference to its internal regulations, including estab-
lishing an emergency response task force when necessary.
In the March 2018 fiscal year, Mazda revised its Risk Management
Regulations, clarifying in writing necessary matters for the continuous
promotion of activities in collaboration with affiliates. Mazda also
worked to make these revisions well known. Based on a mid-term
activity plan formulated in the previous fiscal year, the Risk Compliance
Committee has been striving to further visualize risks at Mazda and its
Group companies and strengthen risk management activities. Every six
months, the committee assesses the progress of such efforts. In the
Mazda Internal Controls
Enhancement of IT Security• Setting IT Security Management Regulations• IT system auditing, etc.
Monitoring• Self-diagnosis of internal controls• Internal auditing, etc.
Information and Communication• Internal control sign-off system• Mazda Global Hotline, etc.
Control Activities• Developing / operating work processes
(Developing procedures, manager approvals, etc.)
Risk Assessment• Risk Compliance Committee• Revising self-diagnosis checklist, etc.
Efficacy / EfficiencyFinancial Reporting Compliance
Asset Protection
Control Environment• Mazda Corporate Ethics Code of Conduct• Finance Control Guideline, etc.
Overseas G
roup
Co
mp
anies
Gro
up C
om
panies in Jap
an
Mazd
a Emergency Risk Management Structure
Executive Officer in charge of Risk Management
Emergency Response Task Force
Representative Director and President
Departments within Mazda Mazda Group Companies
For incidents that fall outside the scope of existing risk management organizations and require a coordinated interdepartmental response, the executive officer in charge of risk management will consult with the president, establish an emergency response task force, and appoint a general manager for this task force.
Instruction, assistance
Promotion
Risks of Company-wide level
Risk Management Structure in Normal Times
Executive Officer in charge of Compliance & Risk Management
Department in charge of promoting risk management
Department responsible for each risk
Risk Compliance Committee
Representative Director and President
Executive Officers in charge
Departments within Mazda Mazda Group Companies
Individual business risks
Foundations Underpinning Sustainable Growth
36 MAZDA ANNUAL REPORT 2018
Information SecurityPersonal information and other important information are appropri-
ately managed and protected based on the established information
management policies and internal regulations, so as to ensure infor-
mation security. To raise employees’ awareness about information
security, Mazda requires its employees to execute training on the
management of confidential information, protection of personal
information, and IT security. When newly joining the Company, man-
agement of confidential information is covered in the introduction
program, while e-learning is used for personal information protection
and IT security training. Other continuous education efforts are also
available, including an Intranet site dedicated to information and
knowledge on information security.
For companies in the Mazda Group, Mazda provides guidelines
and educational tools regarding information security, realizing a
Group-wide effort to ensure information security.
IT Security Management RulesThe IT security policy based on the BS 7799* framework has been
established as IT security management rules, under which the mecha-
nisms for security control and monitoring that should be incorporated
into IT systems are determined. Whether such mechanisms are prop-
erly installed and operated is confirmed on both a regular and
random basis.
* Standards on information security management established by the British Standards Institution (BSI), on which ISO/IEC 27001 & 27002, the current international standards for information security management, are based.
Protection of Personal InformationMazda rigorously protects personal information in line with its own
Personal Information Protection Policy. Handling rules are set out in
order to ensure appropriate management of personal information,
regular examination of management records for retained personal
data is taken, and management statuses are checked once a year. In
cases in which the handling of personal information is entrusted to
outside parties, such contractors are carefully selected based on a
checklist which determined the necessary items including security
management. The Mazda Call Center responds to customers who
wish to inquire about the Company’s handling of personal informa-
tion and those who request disclosure regarding privacy issues.
In the March 2018 fiscal year, Mazda revised its regulations and
procedures regarding the handling of personal information in
accordance with the enactment of the Revisions to the Act on the
Protection of Personal Information. Mazda also established a new
e-learning program on the basic rules for handling personal informa-
tion. Furthermore, Mazda worked to provide information to Group
companies and support their response to the Act’s revisions. Mazda
is currently assessing the impact of the EU General Data Protection
Regulation, which went into effect in 2018, on its businesses and
is making efforts to respond appropriately to this regulation.
Basic Policy on Intellectual PropertyMazda’s overall vision for intellectual property is to use intellectual
property as a management resource in support of its business man-
agement and enterprise activities, based on respect for its own and
others’ intellectual property. Based on this vision, Mazda has estab-
lished an Intellectual Property Committee to discuss and decide key
items regarding intellectual property. The committee is comprised of
division general managers from related divisions and chaired by an
executive officer responsible for intellectual property issues. Also, the
invention incentive system increases motivation for inventions among
employees working at the forefront of research and development. For
its Group companies in Japan and overseas, Mazda supports them in
developing / implementing policies and establishing systems for han-
dling intellectual property, with the aim of enhancing the intellectual
property management functions of the entire Mazda Group.
ComplianceAt Mazda, the concept of compliance applies not only to laws and
regulations but also includes adherence to other rules such as internal
guidelines and societal norms and expectations. Business operations
are conducted in accordance with the Mazda Corporate Ethics Code
of Conduct to ensure fair and honest practice. This also applies
overseas; Mazda not only complies with international regulations and
the laws of each country and region but also respects local history,
culture, and customs. The Mazda Corporate Ethics Code of Conduct
is revised as needed to cope with changes in the social environment,
social needs, etc.
The Global Employee Engagement Survey, which includes a ques-
tionnaire concerning compliance, is conducted to check the employ-
ees’ degree of understanding of compliance.
Compliance Promotion System
Risk Compliance Committee
Corporate Services DivisionMazda Global Hotline
Representative Director and President
Departments within Mazda(Department General Managers = Persons in charge of compliance)
Mazda Group Companies
Liaison
ReportingDeliberation of handling
Recommen dation / advice
37MAZDA ANNUAL REPORT 2018
Foundations Underpinning Sustainable Growth
Foundations Underpinning Sustainable Growth
38 MAZDA ANNUAL REPORT 2018
Directors, Audit & Supervisory Board Members, and Executive Officers (As of June 26, 2018)
Directors
Nobuhide InamotoDirector
Apr. 1977 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor
Corporation)Oct. 1994 Manager, Body Production Engineering Dept., Production
Engineering Div.Jun. 1999 Representative Director and
President, Mitsuba Kogyo Co., Ltd.Jun. 2001 DirectorJun. 2002 Executive OfficerApr. 2007 Managing Executive OfficerJun. 2013 Director; Senior Managing
Executive Officer; Chairman, Mazda Motor (China) Co., Ltd.
Number of shares held:9,000
Kiyotaka ShobudaDirector
Mar. 1982 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor
Corporation)Apr. 2006 Deputy General Manager,
Hofu PlantNov. 2008 Executive Officer; President, AutoAlliance (Thailand) Co., Ltd.Jun. 2013 Managing Executive OfficerApr. 2016 Senior Managing Executive OfficerJun. 2016 Director; Senior Managing
Executive Officer
Number of shares held:6,900
Mitsuru OnoDirector
Apr. 1981 Joined Sumitomo Bank, Ltd. (present Sumitomo Mitsui Banking
Corp.)Apr. 2011 Executive Officer, General
Manager of International Credit Management Dept.
Jun. 2015 Standing AuditorMay 2017 Joined Mazda Motor Corporation
as AdvisorJun. 2017 Director and Senior Managing
Executive Officer
Number of shares held:200
Akira KogaDirector
Mar. 1984 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor
Corporation)Feb. 2002 General Manager,
Corporate Planning Dept.Mar. 2004 General Manager,
Corporate Planning Div.Nov. 2008 Executive OfficerApr. 2011 Executive Officer; Executive
Vice President, Mazda Motor of America, Inc. (Mazda North American Operations)
Jun. 2013 Managing Executive OfficerApr. 2016 Senior Managing Executive OfficerJun. 2018 Director and Senior Managing
Executive Officer
Number of shares held:2,400
Kiyoshi FujiwaraRepresentative Director
Mar. 1982 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor Corporation)Mar. 2003 Vice President,
Mazda Motor Europe GmbHJun. 2005 General Manager, Product Planning
& Business Strategy Div.Nov. 2008 Executive OfficerJun. 2013 Managing Executive OfficerApr. 2015 Managing Executive Officer; President, Mazda Engineering &
Technology Co., Ltd.Apr. 2016 Senior Managing Executive OfficerJun. 2016 Director; Senior Managing
Executive OfficerJun. 2018 Representative Director;
Executive Vice President
Number of shares held:5,300
Ichiro SakaiDirector
Apr. 1968 Appointed ProsecutorDec. 1999 Chief Public Prosecutor of the
Yokohama District Public Prosecutors Office
May 2001 Chief of the Research and Training Institute of the Ministry of JusticeOct. 2002 Superintendent Public Prosecutor
of the Hiroshima High Public Prosecutors Office
Jun. 2004 Superintendent Public Prosecutor of the Fukuoka High Public Prosecutors Office
Apr. 2005 Registered as Lawyer (Daiichi Tokyo Bar Association)Jun. 2005 Outside Corporate Auditor,
Toray Industries, Inc.Feb. 2006 Outside Corporate Auditor,
Kewpie CorporationJun. 2007 Outside Corporate Auditor,
Mazda Motor CorporationJun. 2011 Outside Director,
Mazda Motor CorporationFeb. 2014 Outside Director, Kewpie
Corporation
Number of shares held:9,300
Kazuaki JonoDirector
Apr. 1970 Joined Hiroshima PrefectureApr. 2005 General Manager, General Affairs
and Planning Dept., Hiroshima Prefecture
Apr. 2006 General Manager, General Affairs Dept., Hiroshima PrefectureApr. 2007 Vice Governor, Hiroshima
PrefectureApr. 2014 Advisor, Hiroshima Prefectural
Union of Agricultural CooperativesJun. 2015 Outside Director, Mazda Motor Corporation
Number of shares held:1,800
Masamichi KogaiRepresentative Director and Chairman of the Board
Apr. 1977 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor Corporation)
Jun. 2004 Executive Officer; General Manager, Hofu Plant
Apr. 2008 Managing Executive OfficerApr. 2010 Senior Managing
Executive OfficerJun. 2010 Director; Senior Managing
Executive OfficerJun. 2013 Representative Director;
President and CEOJun. 2018 Representative Director and
Chairman of the Board
Number of shares held:8,200
Akira MarumotoRepresentative Director
Apr. 1980 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor
Corporation)Jun. 1997 Program Manager; Program
Managers Div.Jun. 1999 DirectorJun. 2002 Executive OfficerApr. 2006 Managing Executive OfficerApr. 2010 Senior Managing Executive OfficerJun. 2010 Director; Senior Managing
Executive OfficerJun. 2013 Representative Director;
Executive Vice PresidentJun. 2018 Representative Director;
President and CEO
Number of shares held:9,300
Yuji NakamineDirector
Apr. 1977 Joined Toyo Kogyo Co., Ltd. (present Mazda Motor
Corporation)Mar. 2003 President, AutoAlliance (Thailand)
Co., Ltd.Jun. 2005 Executive OfficerApr. 2007 Executive Officer; President,
Mazda South East Asia Ltd.Nov. 2008 Managing Executive OfficerApr. 2011 Senior Managing Executive OfficerJun. 2011 Director; Senior Managing
Executive Officer
Number of shares held:13,100
39MAZDA ANNUAL REPORT 2018
Foundations Underpinning Sustainable Growth
President and CEO
Akira Marumoto*
Executive Vice President
Kiyoshi Fujiwara*Assistant to President; Oversight of Operations in North America, R&D and MDI
Senior Managing Executive Officers
Yuji Nakamine*Oversight of Operations in Europe, Asia & Oceania, Middle East & Africa and New Emerging Markets
Nobuhide Inamoto*Oversight of Operations in China, Domestic Sales and Fleet Sales
Kiyotaka Shobuda*Oversight of Quality, Brand Enhancement, Purchasing, Production and Business Logistics
Mitsuru Ono*Oversight of Financial Services and Administrative Domain; Assistant to the Officer overseeing Fleet Sales
Akira Koga*Oversight of Corporate Planning Domain; In charge of Global IT Solution and MDI
Jeffrey H. GuytonAssistant to the Officer overseeing Brand Enhancement; President and CEO, Mazda Motor Europe GmbH
Masahiro MoroOversight of Marketing Strategy; Assistant to the Officer overseeing Brand Enhancement; President and CEO, Mazda Motor of America, Inc. (Mazda North American Operations)
Managing Executive Officers
Mitsuo Hitomi (Senior Technical Fellow)
In charge of Technical Research Center and Integrated Control System Development
Masatoshi MaruyamaIn charge of Global Production and Global Business Logistics
Kazuhisa FujikawaIn charge of Global Purchasing and Cost Innovation
Kazuyuki FukuharaIn charge of Domestic Sales and Fleet Sales; President, Mazda Chuhan Co., Ltd.
Ikuo MaedaIn charge of Design and Brand Style
Tetsuya FujimotoAssistant to the Officer overseeing Corporate Planning Domain; In charge of Financial Services
* Note: Mark of “*” stands for the Executive Officers who also
hold the post of Director
Nobuhiko WatabeIn charge of Operations in China; Chairman, Mazda Motor (China) Co., Ltd.
Hiroshi InoueIn charge of ASEAN Business and New Emerging Markets; President, Mazda South East Asia Ltd.
Yasuhiro AoyamaGlobal Sales Coordination; In charge of Brand Enhancement and Global Marketing
Ichiro HiroseIn charge of Powertrain Development, Vehicle Development, Product Planning and Cost Innovation
Raita NishiyamaOversight of Tokyo Office; In charge of Corporate Liaison; Assistant to the Officer in charge of Corporate Planning and Corporate Communications
Makoto YoshiharaAssistant to the Officer overseeing Administrative Domain; In charge of Global Auditing, CSR, Environment, Secretariat, General & Legal Affairs, Compliance and Risk Management
Takeshi MukaiIn charge of Global Quality; Assistant to the Officer in charge of Cost Innovation
Executive Officers
Hidenori KawakamiAssistant to the Officer in charge of Global Production; General Manager, Hofu Plant
Chiharu MizutaniPresident and CEO, Mazda Motor Manufacturing de Mexico, S.A. de C.V. (Mazda de Mexico Vehicle Operation)
Masashi AiharaGeneral Manager, US Production Preparation Office; President, Mazda Toyota Manufacturing, U.S.A., Inc.
Ryuichi UmeshitaIn charge of Customer Service; Assistant to the Officer in charge of Brand Enhancement and Global Marketing
Kazuhisa YoshidaIn charge of Global Human Resources, Safety, Health & Disaster Prevention and Mazda Hospital
Hidetoshi KudoIn charge of R&D Administration and Product Strategy
Hiroyuki MatsumotoGeneral Manager, Vehicle Development Div.
Takeji KojimaGeneral Manager, Corporate Communications Div.
Executive OfficersAudit & Supervisory Board Members
Hirofumi Kawamura (Full-time)
Masahiro Yasuda (Full-time)
Takao Hotta
Kunihiko Tamano
Akira Kitamura
* 1 The translation of the Japanese yen amounts into U.S. dollars is presented solely for the convenience of readers outside of Japan, using the prevailing exchange rate on March 31,
2018, of ¥106 to US$1.
2 Results information for the March 2011 fiscal year include 15-month results for certain overseas subsidiaries that changed their fiscal year-end.
3 Sales is categorized into the regions based on the customers’ locations.
4 Capital expenditures are calculated on an accrual basis.
5 Free cash flow represents the sum of net cash flows from operating activities and from investing activities.
6 The computations of net income/(loss) per share of common stock are based on the average number of shares outstanding during each fiscal year.
7 Cash dividends per share represent actual amounts applicable to each fiscal year.
8 The amounts of net assets used in the calculation of net assets per share exclude non-controlling interests (and, from the March 2008 fiscal year to the March 2013 fiscal year and
from the March 2017 fiscal year to the March 2018 fiscal year, stock acquisition rights) from net assets.
9 The amounts of equity exclude non-controlling interests (and, from the March 2008 fiscal year to the March 2013 fiscal year and from the March 2017 fiscal year to the March
2018 fiscal year, stock acquisition rights) from net assets.
10 A share consolidation was implemented on common stock with a ratio of five shares to one share on August 1, 2014. Average number of shares outstanding, net income per share
and net assets per share are calculated based on the assumption that consolidation of shares had been carried out at the beginning of the March 2014 fiscal year.
11 Percentage after consideration of the equity credit attributes of the subordinated loan is 45.0%.
ELEVEN-YEAR SUMMARY OF CONSOLIDATED FINANCIAL STATEMENTSMazda Motor Corporation and Consolidated SubsidiariesYears ended March 31
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2018
Business results*2 (Millions of yen): Thousands of U.S. dollars*1
Net sales*3 ¥3,474,024 ¥3,214,363 ¥3,406,603 ¥3,033,899 ¥2,692,238 ¥2,205,270 ¥2,033,058 ¥2,325,689 ¥2,163,949 ¥2,535,902 ¥3,475,789 $32,773,811
Domestic 631,229 587,025 660,935 617,397 655,716 588,042 560,216 541,490 574,982 620,336 880,132 5,954,991
Overseas 2,842,795 2,627,338 2,745,668 2,416,502 2,036,522 1,617,228 1,472,842 1,784,199 1,588,967 1,915,566 2,595,657 26,818,821
Cost of sales 2,653,600 2,448,184 2,567,465 2,247,720 1,993,643 1,729,296 1,662,592 1,863,678 1,710,699 2,021,851 2,485,905 25,033,962
Selling, general and administrative expenses 674,003 640,492 612,363 583,291 516,474 422,038 409,184 438,176 443,792 542,432 827,737 6,358,519
Operating income/(loss) 146,421 125,687 226,775 202,888 182,121 53,936 (38,718) 23,835 9,458 (28,381) 162,147 1,381,330
Income/(loss) before income taxes 157,484 128,413 166,986 209,335 97,409 39,101 (55,262) 16,081 (7,265) (51,339) 143,117 1,485,698
Net income/(loss) attributable to owners of the parent 112,057 93,780 134,419 158,808 135,699 34,304 (107,733) (60,042) (6,478) (71,489) 91,835 1,057,141
Capital expenditures*4 104,129 94,399 89,214 131,010 133,216 77,190 78,040 44,722 29,837 81,838 75,518 982,349
Depreciation and amortization 86,954 82,416 78,972 68,872 57,656 59,954 68,791 71,576 76,428 84,043 74,217 820,321
Research and development costs 136,009 126,915 116,610 108,378 99,363 89,930 91,716 90,961 85,206 95,967 114,400 1,283,104
Cash flows:
Operating cash flows 207,795 161,097 262,770 204,459 136,379 49,033 (9,098) 15,344 111,646 (67,418) 102,969 1,960,330
Investing cash flows (159,989) (63,751) (108,092) (95,548) (120,057) (40,287) (70,317) (13,717) (44,252) (61,826) (92,760) (1,509,330)
Free cash flow*5 47,806 97,346 154,678 108,911 16,322 8,746 (79,415) 1,627 67,394 (129,244) 10,209 451,000
Financing cash flows 30,461 (149,898) (94,062) (62,776) 10,483 (57,181) 236,462 (14,360) 60,951 137,008 (24,095) 287,368
Financial position (Millions of yen):
Total assets ¥2,728,087 ¥2,524,552 ¥2,548,401 ¥2,473,287 ¥2,246,036 ¥1,978,567 ¥1,915,943 ¥1,771,767 ¥1,947,769 ¥1,800,981 ¥1,985,566 $25,736,669
Net assets 1,219,470 1,064,038 976,723 891,326 676,837 513,226 474,429 430,539 509,815 414,731 554,154 11,504,433
Interest-bearing debt 497,893 491,434 617,132 701,019 742,735 718,983 778,085 693,000 722,128 753,355 504,979 4,697,104
Net interest-bearing debt (106,961) (35,430) 48,418 171,871 262,981 274,108 300,778 370,151 375,825 532,631 281,085 (1,009,066)
Amounts per share of common stock (Yen): U.S. dollars*1
Net income/(loss)*6 ¥ 182.93 ¥ 156.87 ¥ 224.85 ¥ 265.64*10 ¥ 226.99*10 ¥ 11.48 ¥ (57.80) ¥ (33.92) ¥ (4.26) ¥ (52.13) ¥ 65.21 $ 1.73
Cash dividends applicable to the year*7 35.00 35.00 30.00 10.00 1.00 — — — 3.00 3.00 6.00 0.33
Net assets*8 1,894.29 1,738.70 1,595.83 1,454.61*10 1,105.21*10 166.04 156.85 242.24 286.92 314.98 391.82 17.87
Financial indicators (%):
Operating income ratio 4.2% 3.9% 6.7% 6.7% 6.8% 2.4% (1.9)% 1.0 % 0.4 % (1.1)% 4.7%
Return on equity (ROE)*9 10.0 9.4 14.7 20.8 23.5 7.1 (24.0) (12.8) (1.4) (14.8) 17.9
Equity ratio*9 43.7*11 41.2 37.4 35.2 29.4 25.1 24.5 24.2 26.1 22.9 27.8
Average number of shares outstanding (in thousands)
612,554 597,816 597,819 597,823*10 597,829*10 2,989,171 1,863,949 1,770,198 1,519,652 1,371,456 1,408,368
Number of employees (People) 49,755 48,849 46,398 44,035 40,892 37,745 37,617 38,117 38,987 39,852 39,364
Financial Section
40 MAZDA ANNUAL REPORT 2018
ELEVEN-YEAR SUMMARY OF CONSOLIDATED FINANCIAL STATEMENTSMazda Motor Corporation and Consolidated SubsidiariesYears ended March 31
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2018
Business results*2 (Millions of yen): Thousands of U.S. dollars*1
Net sales*3 ¥3,474,024 ¥3,214,363 ¥3,406,603 ¥3,033,899 ¥2,692,238 ¥2,205,270 ¥2,033,058 ¥2,325,689 ¥2,163,949 ¥2,535,902 ¥3,475,789 $32,773,811
Domestic 631,229 587,025 660,935 617,397 655,716 588,042 560,216 541,490 574,982 620,336 880,132 5,954,991
Overseas 2,842,795 2,627,338 2,745,668 2,416,502 2,036,522 1,617,228 1,472,842 1,784,199 1,588,967 1,915,566 2,595,657 26,818,821
Cost of sales 2,653,600 2,448,184 2,567,465 2,247,720 1,993,643 1,729,296 1,662,592 1,863,678 1,710,699 2,021,851 2,485,905 25,033,962
Selling, general and administrative expenses 674,003 640,492 612,363 583,291 516,474 422,038 409,184 438,176 443,792 542,432 827,737 6,358,519
Operating income/(loss) 146,421 125,687 226,775 202,888 182,121 53,936 (38,718) 23,835 9,458 (28,381) 162,147 1,381,330
Income/(loss) before income taxes 157,484 128,413 166,986 209,335 97,409 39,101 (55,262) 16,081 (7,265) (51,339) 143,117 1,485,698
Net income/(loss) attributable to owners of the parent 112,057 93,780 134,419 158,808 135,699 34,304 (107,733) (60,042) (6,478) (71,489) 91,835 1,057,141
Capital expenditures*4 104,129 94,399 89,214 131,010 133,216 77,190 78,040 44,722 29,837 81,838 75,518 982,349
Depreciation and amortization 86,954 82,416 78,972 68,872 57,656 59,954 68,791 71,576 76,428 84,043 74,217 820,321
Research and development costs 136,009 126,915 116,610 108,378 99,363 89,930 91,716 90,961 85,206 95,967 114,400 1,283,104
Cash flows:
Operating cash flows 207,795 161,097 262,770 204,459 136,379 49,033 (9,098) 15,344 111,646 (67,418) 102,969 1,960,330
Investing cash flows (159,989) (63,751) (108,092) (95,548) (120,057) (40,287) (70,317) (13,717) (44,252) (61,826) (92,760) (1,509,330)
Free cash flow*5 47,806 97,346 154,678 108,911 16,322 8,746 (79,415) 1,627 67,394 (129,244) 10,209 451,000
Financing cash flows 30,461 (149,898) (94,062) (62,776) 10,483 (57,181) 236,462 (14,360) 60,951 137,008 (24,095) 287,368
Financial position (Millions of yen):
Total assets ¥2,728,087 ¥2,524,552 ¥2,548,401 ¥2,473,287 ¥2,246,036 ¥1,978,567 ¥1,915,943 ¥1,771,767 ¥1,947,769 ¥1,800,981 ¥1,985,566 $25,736,669
Net assets 1,219,470 1,064,038 976,723 891,326 676,837 513,226 474,429 430,539 509,815 414,731 554,154 11,504,433
Interest-bearing debt 497,893 491,434 617,132 701,019 742,735 718,983 778,085 693,000 722,128 753,355 504,979 4,697,104
Net interest-bearing debt (106,961) (35,430) 48,418 171,871 262,981 274,108 300,778 370,151 375,825 532,631 281,085 (1,009,066)
Amounts per share of common stock (Yen): U.S. dollars*1
Net income/(loss)*6 ¥ 182.93 ¥ 156.87 ¥ 224.85 ¥ 265.64*10 ¥ 226.99*10 ¥ 11.48 ¥ (57.80) ¥ (33.92) ¥ (4.26) ¥ (52.13) ¥ 65.21 $ 1.73
Cash dividends applicable to the year*7 35.00 35.00 30.00 10.00 1.00 — — — 3.00 3.00 6.00 0.33
Net assets*8 1,894.29 1,738.70 1,595.83 1,454.61*10 1,105.21*10 166.04 156.85 242.24 286.92 314.98 391.82 17.87
Financial indicators (%):
Operating income ratio 4.2% 3.9% 6.7% 6.7% 6.8% 2.4% (1.9)% 1.0 % 0.4 % (1.1)% 4.7%
Return on equity (ROE)*9 10.0 9.4 14.7 20.8 23.5 7.1 (24.0) (12.8) (1.4) (14.8) 17.9
Equity ratio*9 43.7*11 41.2 37.4 35.2 29.4 25.1 24.5 24.2 26.1 22.9 27.8
Average number of shares outstanding (in thousands)
612,554 597,816 597,819 597,823*10 597,829*10 2,989,171 1,863,949 1,770,198 1,519,652 1,371,456 1,408,368
Number of employees (People) 49,755 48,849 46,398 44,035 40,892 37,745 37,617 38,117 38,987 39,852 39,364
41MAZDA ANNUAL REPORT 2018
Financial Section
BUSINESS RESULTS, FINANCIAL POSITION, AND CASH FLOWS
Review of Operations for the March 2018 Fiscal Year Operating EnvironmentThe operating environment for the Mazda Group in the March
2018 fiscal year—the year ended March 31, 2018—showed
moderate improvement overall due to a recovery in the global
economy. Overseas, the U.S. economy steadily improved on
the back of robust employment and income environments. In
addition, as a result of export growth that followed the recovery
in overseas economies, the European economy enjoyed favorable
conditions. The economies of developing countries remained
strong overall with China’s economy continuing to experience
stable growth. In Japan, as the result of increased consumer
spending and higher corporate earnings, the economy made
a modest recovery.
Amid these circumstances, the Mazda Group made efforts
to offer attractive products that provide driving pleasure and
outstanding environmental and safety performance under its
Structural Reform Stage 2 medium-term business plan. At the
same time, the Group worked to further improve its brand value
with the aim of realizing qualitative growth in all areas of its
business.
Global Sales VolumesWith a boost from global sales of the all-new Mazda CX-5 and
continued strong sales in China and Thailand, global sales
volume was up 4.6% year on year and set a new record at
1,631,000 units.
By market, sales volume in Japan was up 3.8% year on year,
to 210,000 units. This was the result of contributions from the
new Mazda CX-8, which has continued to sell more than the
targeted volume since its launch in December 2017, as well as
the new CX-5, whose sales volume has far exceeded that of the
previous fiscal year. Sales volume in North America rose 1.5%,
to 435,000 units, on the back of sales increases in not only the
United States but also Canada and Mexico. Specifically, in the
United States, despite a decline in demand for sedans and
intensifying competition in the sedan market, robust sales of
the new CX-5 and other crossovers resulted in a 0.7% increase
in sales volume, to 304,000 units. In Europe, sales volume
climbed 2.6%, to 269,000 units. Sales in the key market of
Germany were solid, and sales in Russia rose significantly over
the previous fiscal year. Sales of the new CX-5, which have been
strong throughout Europe since its launch, were up, thus contrib-
uting to the overall sales volume increase in Europe. Sales volume
in China increased 10.5%, to a record-high 322,000 units. In
addition to continued strong sales of the Mazda3, this increase
was the result of brisk sales of crossovers, including the Mazda
CX-4 and the new CX-5. Sales volume in other markets rose
5.3%, to 394,000 units. In the major market of Australia, sales
declined 2.2%, to 116,000 units, despite the continued healthy
sales of the new CX-5 and other crossovers. Among countries in
the ASEAN market, sales grew significantly year on year in
Thailand. In other regions, record sales were achieved in
countries such as New Zealand and Chile.
Consolidated wholesales edged up 0.7% from the previous
year, to 1,274,000 units.
Net SalesNet sales totaled ¥3,474.0 billion, an increase of ¥259.7 billion,
or 8.1%, from the previous fiscal year, reflecting the increase in
sales volumes and the impact of yen depreciation. By region,
domestic sales were up ¥44.2 billion, or 7.5%, to ¥631.2 billion,
as the result of higher sales volumes. Overseas sales rose ¥215.5
billion, or 8.2%, to ¥2,842.8 billion, due in part to the increased
sales volumes of the new CX-5 and other crossovers as well as
the impact of yen depreciation.
By product, vehicle sales were up ¥185.7 billion, or 7.0%, to
¥2,843.9 billion, owing primarily to the rise in sales volumes.
Sales of knockdown parts for overseas production grew ¥25.7
billion, or 31.0%, to ¥108.5 billion, following favorable sales in
China. Sales of parts also increased, climbing ¥29.7 billion, or
12.6%, to ¥266.1 billion. Other sales rose ¥18.6 billion, or 7.9%,
to ¥255.5 billion.
Sales Trends by Major Markets(Thousands of units)
(Years ended March 31)
2014 2015 2016 2017 2018
1,631
394
322
269
435
210
1,559
373
292
262
429
203
303
215
229
425
225
1,3971,534
372
235
257
438
232
1,331
293
196
207
391
244
Japan North America Europe China Other markets
Net Sales(Billions of yen)
20182014 2015 2016 2017
3,033.9
2,416.5
617.4
3,406.6
2,745.7
660.9
3,214.43,474.0
2,627.4
587.0
2,842.8
631.2
2,692.2
2,036.5
655.7
(Years ended March 31)
Domestic Overseas
Financial Section
42 MAZDA ANNUAL REPORT 2018
Operating IncomeOperating income grew ¥20.7 billion, or 16.5%, to ¥146.4 billion.
This reflects expanded crossover sales, global activities to
improve costs, and the impact of the yen depreciating against the
U.S. dollar, euro, and other currencies. These factors offset the
decline in sedan wholesales in the U.S. market, increased
marketing expenses due to intensifying competition, and costs
associated with the strengthening of growth investments toward
such areas as next-generation technologies and products.
Operating income ratio edged up 0.3 of a percentage point,
to 4.2%.
Ordinary Income and Net Income Attributable to Owners of the ParentOrdinary income was up ¥32.6 billion, or 23.4%, to ¥172.1 billion,
owing primarily to the recording of a ¥32.4 billion gain from equity
in net income of affiliated companies as a result of contributions
from Chinese affiliates. Net income attributable to owners of the
parent rose ¥18.3 billion, or 19.5%, to ¥112.1 billion. This result
mainly reflects a litigation settlement totaling ¥7.5 billion from a
class action lawsuit in the United States related to airbag inflators,
as well as tax expenses of ¥42.9 billion.
Segment InformationNet sales in Japan increased ¥176.0 billion, or 6.6%, to ¥2,854.0
billion, with a ¥15.7 billion, or 23.8%, rise in operating income, to
¥81.6 billion. These results were mainly due to increased whole-
sales and yen depreciation. Segment assets stood at ¥2,182.9
billion, up ¥184.3 billion.
In North America, net sales climbed ¥39.7 billion, or 3.0%, to
¥1,358.4 billion, while operating income edged up ¥0.3 billion,
or 1.1%, to ¥27.0 billion. These results reflected primarily the
increase in sales volumes in Canada and Mexico, which helped
offset difficult conditions in the U.S. sales environment. Segment
assets totaled ¥398.0 billion, down ¥21.0 billion.
European net sales rose ¥108.1 billion, or 17.9%, to ¥712.9
billion, and operating income grew ¥3.3 billion, or 61.7%, to
¥8.7 billion. These increases were the result of such factors as the
increase in sales volumes in the major markets of Germany and
Russia, as well as the impact of yen depreciation. Segment assets
came to ¥216.5 billion, an increase of ¥13.8 billion.
In other markets, net sales were up ¥88.9 billion, or 15.1%,
to ¥678.0 billion, while operating income climbed ¥5.2 billion,
or 25.9%, to ¥25.4 billion, owing primarily to increased sales
volume in Thailand and the impact of yen depreciation.
Segment assets stood at ¥309.4 billion, up ¥33.6 billion.
Financial PositionTotal assets as of March 31, 2018, came to ¥2,728.1 billion,
up ¥203.5 billion from the end of the previous fiscal year. This
increase was due mainly to the rise in securities related to short-
term funding and the increase in investment securities resulting
from the acquisition of shares in Toyota Motor Corporation.
Total liabilities amounted to ¥1,508.6 billion, an increase of
¥48.1 billion from the end of the previous fiscal year, owing in
part to a rise in accounts payable–trade and the issuance of
bonds. Interest-bearing debt was up ¥6.5 billion, to ¥497.9
billion, as the issuance of bonds and other factors offset a decline
in short-term loans payable.
Net assets amounted to ¥1,219.5 billion, an increase of ¥155.4
billion from the end of the previous fiscal year, with the recording
of ¥112.1 billion of net income attributable to owners of the
parent as well as the issuance of new shares by way of third-party
allotment to Toyota Motor Corporation. Equity ratio increased
2.5 percentage points from the end of the previous fiscal year, to
43.7% (percentage after consideration of the equity credit attri-
butes of the subordinated loan was 45.0%).
Operating Income / Net Income Attributable to Owners of the Parent(Billions of yen)
(Years ended March 31)
2018
112.1
146.4
2014 2015 2016 2017
158.8
202.9
134.4
226.8
93.8
125.7135.7
182.1
Operating Income Net Income Attributable to Owners of the Parent
Operating Income Change(Billions of yen)
Improvement Deterioration
(Years ended March 31)
2017 2018
Volume and mix
(24.0)
YoY +20.7
Foreign exchange+40.0
Cost improvements
+10.5
(9.1)
Other+3.3
125.7
146.4
Developmentcosts
43MAZDA ANNUAL REPORT 2018
Financial Section
Cash FlowsIn the March 2018 fiscal year, net cash provided by operating
activities was ¥207.8 billion, compared with net cash provided
by operating activities of ¥161.1 billion in the previous fiscal year,
reflecting income before income taxes of ¥157.5 billion.
Net cash used in investing activities came to ¥160.0 billion,
compared with the ¥63.8 billion used in the previous fiscal year,
due mainly to capital expenditure for the acquisition of property,
plant and equipment of ¥87.1 billion, as well as the purchase
of stock in accordance with the business and capital alliance with
Toyota Motor Corporation.
As a result, consolidated free cash flow (the total of operating
cash flows and investing cash flows) was positive in the amount
of ¥47.8 billion, compared with the previous fiscal year’s positive
free cash flow of ¥97.3 billion.
Net cash provided by financing activities was ¥30.5 billion, in
contrast to net cash used in financing activities of ¥149.9 billion
in the previous fiscal year, mainly reflecting the issuance of new
shares by way of third-party allotment and the issuance of bonds,
which outweighed dividends payable of ¥20.9 billion.
Cash and cash equivalents as of the fiscal year-end increased
¥78.0 billion from the end of the previous fiscal year, to ¥604.9
billion, while interest-bearing debt climbed ¥6.5 billion, to
¥497.9 billion. As a result, net cash position came to ¥107.0 billion.
Basic Dividend Policy, Dividends for the March 2018 and March 2019 Fiscal YearsMazda strives to pay a stable dividend with steady increases,
under a basic policy of determining the dividend amount by
comprehensively taking into account the Company’s financial
results for the fiscal year, the business environment, and the
Company’s financial position.
For the March 2018 fiscal year, a full-year dividend of ¥35 per
share, consisting of a ¥15 per share interim dividend and a ¥20
per share year-end dividend, was paid. For the March 2019 fiscal
year, we plan to once again pay a full-year dividend of ¥35 per
share, consisting of a ¥15 per share interim dividend and a ¥20
per share year-end dividend.
We intend to use internal reserves for research and develop-
ment and capital investment for future growth.
Forecast for the March 2019 Fiscal Year
While a moderate improvement in the global economy is
expected, with changes in the economic and fiscal policies of
countries around the world, fluctuations in exchange rates, and
the sales trends in the major market of the United States, the
outlook for the Mazda Group’s business environment is uncertain.
Amid these circumstances, in the March 2019 fiscal year, the
final year of Structural Reform Stage 2, the Mazda Group will
work to provide customers with products that are attractive in
terms of both driving pleasure and outstanding environmental
and safety performance, which represent our brand value. The
Group will also make efforts to enhance its brand value through
the qualitative growth of its businesses.
We are projecting a 1.9% increase in global unit sales, to
1,662,000 units. By market, we are forecasting a 2.1% increase
in Japan, to 215,000 units; a 5.1% increase in North America, to
457,000 units; a 1.4% decrease in Europe, to 265,000 units; no
change in China, remaining at 322,000 units; and a 2.2%
increase in other markets, to 403,000 units.
In terms of consolidated financial forecasts, we are projecting
a 2.2% rise in net sales, to ¥3,550.0 billion; a 28.3% decrease
in operating income, to ¥105.0 billion; a 24.5% fall in ordinary
income, to ¥130.0 billion; and a 28.6% decline in net income
attributable to owners of the parent, to ¥80.0 billion. These
projections are based on exchange rate assumptions of ¥107
to the U.S. dollar and ¥130 to the euro.
Cash Flows(Billions of yen)
(Years ended March 31)
2018
47.8
(160.0)
207.8161.1
2014 2015 2016 2017
108.9
154.7
97.3
(95.5)
204.5
(108.1)(63.8)
262.8
16.3
(120.1)
136.4
Cash Flows from Operating Activities
Cash Flows from Investing Activities
Free Cash Flow
Financial Section
44 MAZDA ANNUAL REPORT 2018
BUSINESS RISKS
Significant risks that could affect the Mazda Group’s business
results and financial position include those listed below. This list,
however, shows the main risks anticipated at the end of the fiscal
year ended March 31, 2018, and does not represent a compre-
hensive list of all the risks faced by the Group. The forward-
looking statements in this section are based on the judgments of
the Group as of the end of the fiscal year ended March 31, 2018.
1 Economic Conditions Impacting the Mazda GroupSelling its products in Japan and other parts of the world,
including in North America, Europe, and Asia, the Group is greatly
impacted by economic trends and fluctuations in demand in each
of its markets. Therefore, the Group’s business results and financial
position could be adversely affected by, for example, an economic
downturn, recession, changes in demand structure, declining
demand, and intensifying price competition in its main markets.
2 Fluctuations in Exchange RatesThe Group is engaged in business activities on a global scale.
The Group not only exports products from Japan to other parts
of the world but also exports products manufactured at overseas
plants to other markets in the world. These transactions are
conducted in various currencies, and consequently its business
results and financial position are exposed to the effects of
fluctuations in exchange rates. In addition, as overseas assets
and liabilities denominated in local currencies are translated
into yen, there could be an adverse effect on shareholders’ equity
through foreign currency translation adjustments due to exchange
rate fluctuations.
The Group uses forward-exchange contracts and other instru-
ments to minimize the impact of short-term exchange rate risk.
However, depending on the circumstances of fluctuations in
exchange rates, loss of opportunity could be generated.
3 Alliances and Joint VenturesThe Group is performing or examining joint activities with other
companies under technology alliances, joint ventures, and in
other forms with respect to the development, production, and
sales of products. These joint activities are designed to optimize
resources, facilitate their prioritization, and generate synergies.
However, in the event of a disagreement over management,
financial, or other matters between the parties involved, or in the
event that the expected results were not produced due to such
factors as changes to or terminations of alliances and joint
ventures, the Group’s business results and financial position could
be adversely affected. In addition, unintended changes to or
terminations of alliances and joint ventures could have an adverse
effect on the Group’s business results and financial position.
4 Statutory Regulations Covering the EnvironmentIn addition to being subject to environmental regulations
pertaining to fuel consumption and exhaust emissions, automo-
bile safety, and the pollutant emission levels from manufacturing
plants, the Group’s operations in each country where it does
business are subject to various statutory regulations, such as
labor regulations.
Going forward, the Group’s business results and financial
position could be adversely affected by the increased costs
associated with more stringent statutory regulations.
5 Market CompetitivenessThe Group competes with a large number of companies in
automobile markets in all parts of the world. Maintaining and
enhancing the Group’s ability to compete in these markets, which
includes maintaining and developing Mazda brand value, is
crucial to ensuring growth. Consequently, the Group is imple-
menting a range of initiatives to boost its competitiveness in
product development, manufacturing, sales, and other areas.
However, the Group’s business results and financial position
could be affected in the event that it fails to launch appealing
products at opportune times, due to a failure to accurately ascer-
tain market trends or as a result of issues related to technological
capabilities and manufacturing. The same holds true if the Group
fails to take effective steps to respond to customer values or
changes thereof, including declines in market share or product
prices, through its dealership network or sales methods.
6 Procurement of Materials and ComponentsThe Group relies on numerous suppliers outside the Group for
the procurement of materials and components.
For that reason, the Group may face difficulties in procuring
the necessary level of materials and components for volume
production, due to supply constraints or reduced logistics
functions in the event of these suppliers being affected by a
disaster, due to tight supply balances, or due to changes to
and breaches of supply contracts.
Should the Group be unable to absorb the effects of any
increases in the prices of the materials being procured by the
Company—for example, by making internal efforts to boost
productivity or passing on price rises to customers—or should
procured materials and components be of insufficient quality,
the possibility exists of a deterioration in output or higher costs,
which could adversely affect the Group’s business results and
financial position.
45MAZDA ANNUAL REPORT 2018
Financial Section
7 International Business ActivitiesIn addition to Japan, the Group sells its products and carries out
business activities in markets in all parts of the world, including
the United States and Europe, as well as developing and emerging
markets overseas. In these international markets, the Group is
subject to the following potential risks, which could affect the
Group’s business results and financial position if manifested:
• Adverse political and economic developments
• Impediments arising from changes in laws and regulations
• Import / export regulations, such as tariffs, detrimental taxes,
and other regulations
• Difficulties in attracting and securing personnel
• Undeveloped infrastructure
• Strikes and other labor disputes
• Terrorist incidents, war, disease, and other factors leading to
social disorder
8 Protection of Intellectual PropertyIn order to maintain competitiveness, the Group is working to
accumulate and protect technologies and expertise that help it to
develop unique products. At the same time, the Group is taking
steps to prevent the infringement of third-party intellectual
property rights. Nonetheless, should differences in recognition or
opinion lead to a disputed infringement of third-party intellectual
property rights that results in the Group being forced to halt the
production and sales of products, or needing to pay damages,
this could also adversely affect the Group’s business results and
financial position.
The Group’s intellectual property is not subject to complete
protection in certain regions. In the event that third parties use
the Group’s intellectual property rights on an unauthorized basis
to produce similar products, the Group may have to pay substan-
tial expenses for litigation, or experience a decline in sales due to
an inability to offer unique products. This could adversely affect
the Group’s business results and financial position.
9 Product QualityWhile striving to improve the quality of its products to meet the
requirements of the market, the Group also does its utmost to
ensure the safety of its products. However, should a defect
develop in a product due to unforeseen circumstances or a large-
scale recall occur, this could adversely affect the Group’s business
results and financial position due to such factors as the incurring
of significant costs, the Group’s diminished brand image, and loss
of market trust.
10 Natural Disasters and AccidentsIn addition to measures to protect its manufacturing sites and
other important facilities against fire and earthquakes, the Group
has concluded natural disaster insurance contracts and taken
other steps to minimize the financial risk of such events. However,
the ability of the Group to supply products may be severely
disrupted in the event of a major natural disaster, such as an
earthquake, typhoon, flood, or fire or other accident, which could
adversely affect the Group’s business results and financial position.
11 Dependence on Information TechnologyIn the course of various business activities such as development,
production, and sales of products, the Group utilizes information
technology, networks, and systems. The Group’s products are also
equipped with these technologies, including driving support
system, etc. Despite countermeasures implemented in informa-
tion technology, networks, and systems to allow safe operations,
such factors as failures in infrastructure, cyberattacks, and infec-
tion by computer viruses may result in suspension of business
activities, loss of data, leakage of confidential information, and
deterioration in product functions. Should these events occur, the
Group’s business results and financial position could be adversely
affected due to the incurring of costs associated with counter-
measures, loss of product credibility, and damage to the brand
image, etc.
12 Financial AccountingIncluding the financial accounting factors set out below, the
Group’s operating results and financial position could be affected
by financial accounting assessment of its assets and liabilities as
well as changes in or new applications of accounting standards.
(i) Deferred Tax Assets
Provided on deductible temporary differences, deferred tax
assets are recorded by assessing the likelihood of recovery based
on expectations of future taxable income. However, the amount
of deferred tax assets could be reduced by, for example, the
recording of valuation allowances against deferred tax assets
in the event that they are judged to be unrecoverable due to a
deterioration in business conditions or in the event of tax reforms
that include changes in tax rates. This could adversely affect the
Group’s business results and financial position.
(ii) Impairment of Long-Lived Assets
With regard to long-lived assets, should the carrying amount be
considered to be unrecoverable due, for example, to a deteriora-
tion in business conditions, an impairment loss against the
carrying value of assets will be recorded. This could adversely
affect the Group’s business results and financial position.
Financial Section
46 MAZDA ANNUAL REPORT 2018
(iii) Retirement Benefits
Liability for retirement benefits changes in accordance with
trends in retirement benefit obligations and pension assets.
However, in the event of changes being made to the actuarial
prerequisites or of a deterioration in fair value of plan assets
caused by lower returns, the Group’s business results and finan-
cial position could be adversely affected.
13 Changes in Financing Procurement Environment and Interest Rate Fluctuations
In addition to loans from banks, the Group has been raising
funds by issuing its shares and bonds. However, in the event
of turmoil in financial market tax reforms, institutional changes
being made to government-affiliated financial organizations,
or the downgrading of the Group’s credit rating, the Group’s
business results and financial position could be adversely affected
due to such factors as the increased funding costs and the diffi-
culties associated with raising money for the amount of funds
required. Moreover, factoring in the effect of interest rate changes
on the Group’s interest-bearing debt, were the costs of financing
to increase due to a rise in interest rates, the Group’s business
results and financial position could also be adversely affected. In
the event that any deterioration in the Group’s financial standing
were to infringe the financial covenants of some of the loans and
lead to the forfeiture of the benefit of time, the Group’s business
results and financial position could be adversely affected.
14 Compliance and ReputationCommencing with information security efforts to protect
personal information and confidential information, the Group
has taken preventive measures regarding compliance, such as
compliance with the law. In addition, in the event of a compliance-
related incident being detected, the Group has a rapid response
system in place to prevent any impact on the Group’s social
credibility and reputation. However, the Group cannot guarantee
that there is no possibility of a legal violation occurring in the
future. Should there be evidence of an illegal act or should the
rapidity and content of the response prove insufficient, the
Group’s social credibility and reputation could be harmed, and
the Group’s business results and financial position could be
adversely affected.
15 ForecastsIn order to realize further growth in the future, the Group formu-
lated the Structural Reform Stage 2 medium-term business plan,
which commenced in the March 2017 fiscal year. At the moment,
the Group is working to formulate the next medium-term business
plan. However, ahead of the release of this new plan, in April
2018 the Group announced the Direction of Future Frameworks,
which lays out efforts for realizing sustainable growth going
forward. In implementing these efforts and plans, however, in the
event of external environment changes that differ greatly from
assumptions or progress not being made according to plan, the
expected outcome would not be realized and the Group’s
business results and financial position could be adversely affected.
47MAZDA ANNUAL REPORT 2018
Financial Section
Financial Section
48 MAZDA ANNUAL REPORT 2018
CONSOLIDATED BALANCE SHEETSMazda Motor Corporation and Consolidated Subsidiaries
March 31, 2018 and 2017
Millions of yen
Thousands of U.S. dollars
(Note 1)
ASSETS 2018 2017 2018
Current assets:
Cash and cash equivalents ¥ 604,854 ¥ 526,864 $ 5,706,170
Trade notes and accounts receivable (Note 4) 221,532 215,788 2,089,925
Inventories (Notes 7 and 9) 399,787 376,951 3,771,575
Deferred tax assets (Note 20) 86,081 109,398 812,085
Other current assets 136,265 114,188 1,285,518
Allowance for doubtful receivables (1,028) (818) (9,698)
Total current assets 1,447,491 1,342,371 13,655,575
Property, plant and equipment:
Land (Note 8) 406,117 409,894 3,831,292
Buildings and structures 526,224 511,934 4,964,377
Machinery, equipment and vehicles 904,088 904,911 8,529,132
Tools, furniture and fixtures 216,710 216,263 2,044,434
Leased assets 10,905 9,788 102,877
Construction in progress 47,056 41,134 443,925
2,111,100 2,093,924 19,916,037
Accumulated depreciation (1,139,678) (1,134,599) (10,751,679)
Net property, plant and equipment (Notes 9 and 17) 971,422 959,325 9,164,358
Intangible assets (Note 17) 35,862 33,242 338,321
Investments and other assets:
Investment securities (Note 4):
Affiliated companies 139,632 131,117 1,317,283
Other 70,973 16,321 669,557
Long-term loans receivable (Note 4) 1,433 3,599 13,519
Asset for retirement benefits (Note 19) 3,798 3,629 35,830
Deferred tax assets (Note 20) 29,232 15,491 275,774
Other investments and other assets 28,914 22,322 272,773
Allowance for doubtful receivables (670) (2,865) (6,321)
Total investments and other assets 273,312 189,614 2,578,415
Total assets ¥2,728,087 ¥2,524,552 $25,736,669
See accompanying notes on our official website. http://www.mazda.com/en/investors/library/annual/
49MAZDA ANNUAL REPORT 2018
Financial Section
Millions of yen
Thousands of U.S. dollars
(Note 1)
LIABILITIES AND NET ASSETS 2018 2017 2018
Current liabilities:
Short-term debt (Notes 4 and 9) ¥ 101,844 ¥ 124,454 $ 960,792
Long-term debt due within one year (Notes 4 and 9) 76,541 92,122 722,085
Trade notes and accounts payable (Note 4) 417,589 388,880 3,939,519
Income taxes payable 15,567 13,450 146,858
Accrued expenses (Note 4) 239,382 219,908 2,258,321
Reserve for warranty expenses 104,435 123,455 985,236
Other current liabilities (Note 20) 40,908 33,760 385,925
Total current liabilities 996,266 996,029 9,398,736
Non-current liabilities:
Long-term debt due after one year (Notes 4 and 9) 319,508 274,858 3,014,226
Deferred tax liability related to land revaluation (Note 8) 64,553 64,715 608,991
Liability for retirement benefits (Note 19) 67,287 72,888 634,783
Reserve for loss on business of subsidiaries and affiliates 821 529 7,745
Reserve for environmental measures 529 677 4,991
Other non-current liabilities (Note 20) 59,653 50,818 562,764
Total non-current liabilities 512,351 464,485 4,833,500
Total liabilities 1,508,617 1,460,514 14,232,236
Contingent liabilities (Note 10)
Net assets:
Capital and retained earnings (Note 12):
Common stock 283,957 258,957 2,678,840
Authorized: 1,200,000,000 shares
Issued: 631,803,979 shares in 2018 and 599,875,479 shares in 2017
Capital surplus 264,910 239,909 2,499,151
Retained earnings 536,856 445,353 5,064,679
T reasury stock (2,057,633 shares in 2018 and 2,059,416 shares in 2017) (2,230) (2,231) (21,038)
Total capital and retained earnings 1,083,493 941,988 10,221,632
Accumulated other comprehensive income/(loss):
Net unrealized gain/(loss) on available-for-sale securities 8,786 3,913 82,887
Deferred gains/(losses) on hedges 305 1,188 2,877
Land revaluation (Note 8) 145,574 145,944 1,373,340
Foreign currency translation adjustment (28,576) (33,812) (269,585)
Accumulated adjustments for retirement benefits (16,657) (19,800) (157,142)
Total accumulated other comprehensive income 109,432 97,433 1,032,377
Stock acquisition rights (Note 13) 183 91 1,726
Non-controlling interests 26,362 24,526 248,698
Total net assets 1,219,470 1,064,038 11,504,433
Total liabilities and net assets ¥2,728,087 ¥2,524,552 $25,736,669
Financial Section
50 MAZDA ANNUAL REPORT 2018
Consolidated Statements of Income
Millions of yen
Thousands ofU.S. dollars
(Note 1)
2018 2017 2018
Net sales ¥3,474,024 ¥3,214,363 $32,773,811
Cost and expenses:
Cost of sales 2,653,600 2,448,184 25,033,962
Selling, general and administrative expenses (Note 14) 674,003 640,492 6,358,519
3,327,603 3,088,676 31,392,481
Operating income 146,421 125,687 1,381,330
Other income/(expenses):
Interest and dividend income 5,076 3,540 47,887
Interest expense (7,442) (9,383) (70,208)
Equity in net income of affiliated companies 32,366 30,880 305,340
Other, net (Note 16) (18,937) (22,311) (178,651)
11,063 2,726 104,368
Income before income taxes 157,484 128,413 1,485,698
Income taxes (Note 20):
Current 35,842 30,316 338,132
Deferred 7,074 351 66,736
42,916 30,667 404,868
Net income 114,568 97,746 1,080,830
Net income attributable to non-controlling interests 2,511 3,966 23,689
Net income attributable to owners of the parent ¥ 112,057 ¥ 93,780 $ 1,057,141
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOMEMazda Motor Corporation and Consolidated Subsidiaries
Years ended March 31, 2018 and 2017
YenU.S. dollars
(Note 1)
Amounts per share of common stock:
Net income:
Basic ¥182.93 ¥156.87 $1.73
Diluted 182.90 156.86 1.73
Cash dividends applicable to the year 35.00 35.00 0.33
See accompanying notes on our official website. http://www.mazda.com/en/investors/library/annual/
51MAZDA ANNUAL REPORT 2018
Financial Section
Millions of yen
Thousands ofU.S. dollars
(Note 1)
2018 2017 2018
Net income ¥114,568 ¥ 97,746 $1,080,830
Other comprehensive income/(loss):
Net unrealized gain/(loss) on available-for-sale securities 4,870 184 45,943
Deferred gains/(losses) on hedges (950) 1,652 (8,962)
Foreign currency translation adjustment (248) 7,874 (2,340)
Adjustments for retirement benefits 3,053 5,762 28,802
Share of other comprehensive income/(loss) of affiliates accounted for using equity method 5,207 (4,939) 49,123
Total other comprehensive income/(loss) 11,932 10,533 112,566
Comprehensive income ¥126,500 ¥108,279 $1,193,396
Comprehensive income/(loss) attributable to:
Owners of the parent 124,426 104,583 1,173,830
Non-controlling interests 2,074 3,696 19,566
Consolidated Statements of Comprehensive Income
Financial Section
52 MAZDA ANNUAL REPORT 2018
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSMazda Motor Corporation and Consolidated Subsidiaries
Years ended March 31, 2018 and 2017
Millions of yenCapital and retained earnings
Common stock Capital surplus Retained earnings Treasury stock Total
April 1, 2016 ¥258,957 ¥243,048 ¥367,601 ¥(2,228) ¥ 867,378
Increase/(decrease) Issuance of new common stock — — — — —
Dividends paid — — (17,935) — (17,935)
Net income attributable to owners of the parent — — 93,780 — 93,780
Purchase of treasury stock — — — (3) (3)
Sale of treasury stock — 0 — 0 0
Change of scope of consolidation — — 1,579 — 1,579
Change of scope of equity method — — 320 — 320
Reversal for land revaluation — — 8 — 8
C hange in treasury shares of parent arising from transactions with non-controlling shareholders — (3,139) — — (3,139)
C hanges in items other than capital and retained earnings, net — — — — —
Total changes during the fiscal year — (3,139) 77,752 (3) 74,610
April 1, 2017 ¥258,957 ¥239,909 ¥445,353 ¥(2,231) ¥ 941,988
Increase/(decrease) Issuance of new common stock 25,000 25,000 — — 50,000 Dividends paid — — (20,924) — (20,924) Net income attributable to owners of the parent — — 112,057 — 112,057 Purchase of treasury stock — — — (3) (3) Sale of treasury stock — 1 — 4 5 Change of scope of consolidation — — — — — Change of scope of equity method — — — — — Reversal for land revaluation — — 370 — 370 C hange in treasury shares of parent arising from
transactions with non-controlling shareholders — — — — — C hanges in items other than capital and
retained earnings, net — — — — —Total changes during the fiscal year 25,000 25,001 91,503 1 141,505 March 31, 2018 ¥283,957 ¥264,910 ¥536,856 ¥(2,230) ¥1,083,493
Millions of yenAccumulated other comprehensive income/(loss)
Total netassets
Net unrealized gain/(loss) on available-for- sale securities
Deferred gains/(losses) on
hedgesLand
revaluation
Foreign currency
translation adjustment
Accumulated adjustments
for retirement benefits Total
Stockacquisition
rights
Non- controlling
interests
April 1, 2016 ¥3,721 ¥ (600) ¥145,952 ¥(36,877) ¥(25,558) ¥ 86,638 ¥ — ¥22,707 ¥ 976,723
Increase/(decrease) Issuance of new common stock — — — — — — — — —
Dividends paid — — — — — — — — (17,935)
Net income attributable to owners of the parent — — — — — — — — 93,780
Purchase of treasury stock — — — — — — — — (3)
Sale of treasury stock — — — — — — — — 0
Change of scope of consolidation — — — — — — — — 1,579
Change of scope of equity method — — — — — — — — 320
Reversal for land revaluation — — — — — — — — 8
C hange in treasury shares of parent arising from transactions with non-controlling shareholders — — — — — — — — (3,139)
C hanges in items other than capital and retained earnings, net 192 1,788 (8) 3,065 5,758 10,795 91 1,819 12,705
Total changes during the fiscal year 192 1,788 (8) 3,065 5,758 10,795 91 1,819 87,315
April 1, 2017 ¥3,913 ¥1,188 ¥145,944 ¥(33,812) ¥(19,800) ¥ 97,433 ¥ 91 ¥24,526 ¥1,064,038
Increase/(decrease) Issuance of new common stock — — — — — — — — 50,000
Dividends paid — — — — — — — — (20,924) Net income attributable to owners of the parent — — — — — — — — 112,057 Purchase of treasury stock — — — — — — — — (3) Sale of treasury stock — — — — — — — — 5 Change of scope of consolidation — — — — — — — — — Change of scope of equity method — — — — — — — — — Reversal for land revaluation — — — — — — — — 370 C hange in treasury shares of parent arising from
transactions with non-controlling shareholders — — — — — — — — — C hanges in items other than capital and
retained earnings, net 4,873 (883) (370) 5,236 3,143 11,999 92 1,836 13,927 Total changes during the fiscal year 4,873 (883) (370) 5,236 3,143 11,999 92 1,836 155,432 March 31, 2018 ¥8,786 ¥ 305 ¥145,574 ¥(28,576) ¥(16,657) ¥109,432 ¥183 ¥26,362 ¥1,219,470
See accompanying notes on our official website. http://www.mazda.com/en/investors/library/annual/
53MAZDA ANNUAL REPORT 2018
Financial Section
Thousands of U.S. dollars (Note 1)
Capital and retained earningsCommon stock Capital surplus Retained earnings Treasury stock Total
April 1, 2017 $2,442,991 $2,263,292 $4,201,443 $(21,047) $ 8,886,679
Increase/(decrease)
Issuance of new common stock 235,849 235,849 — — 471,698
Dividends paid — — (197,397) — (197,397)
Net income attributable to owners of the parent — — 1,057,141 — 1,057,141
Purchase of treasury stock — — — (28) (28)
Sale of treasury stock — 10 — 37 47
Change of scope of consolidation — — — — —
Change of scope of equity method — — — — —
Reversal for land revaluation — — 3,492 — 3,492
C hange in treasury shares of parent arising from transactions with non-controlling shareholders — — — — —
C hanges in items other than capital and retained earnings, net — — — — —
Total changes during the fiscal year 235,849 235,859 863,236 9 1,334,953
March 31, 2018 $2,678,840 $2,499,151 $5,064,679 $(21,038) $10,221,632
Thousands of U.S. dollars (Note 1)
Accumulated other comprehensive income/(loss)
Total netassets
Net unrealized gain/(loss) on available-for- sale securities
Deferred gains/(losses)
on hedgesLand
revaluation
Foreign currency
translation adjustment
Accumulated adjustments
for retirement benefits Total
Stockacquisition
rights
Non-controlling
interests
April 1, 2017 $36,915 $11,208 $1,376,830 $(318,981) $(186,792) $ 919,180 $ 858 $231,377 $10,038,094
Increase/(decrease)
Issuance of new common stock — — — — — — — — 471,698
Dividends paid — — — — — — — — (197,397)
Net income attributable to owners of the parent — — — — — — — — 1,057,141
Purchase of treasury stock — — — — — — — — (28)
Sale of treasury stock — — — — — — — — 47
Change of scope of consolidation — — — — — — — — —
Change of scope of equity method — — — — — — — — —
Reversal for land revaluation — — — — — — — — 3,492
C hange in treasury shares of parent arising from transactions with non-controlling shareholders — — — — — — — — —
C hanges in items other than capital and retained earnings, net 45,972 (8,331) (3,490) 49,396 29,650 113,197 868 17,321 131,386
Total changes during the fiscal year 45,972 (8,331) (3,490) 49,396 29,650 113,197 868 17,321 1,466,340
March 31, 2018 $82,887 $ 2,877 $1,373,340 $(269,585) $(157,142) $1,032,377 $1,726 $248,698 $11,504,433
Financial Section
54 MAZDA ANNUAL REPORT 2018
Millions of yen
Thousands ofU.S. dollars
(Note 1)
2018 2017 2018
Cash flows from operating activities:
Income before income taxes ¥157,484 ¥128,413 $1,485,698
A djustments to reconcile income before income taxes to net cash provided by/(used in) operating activities:
Depreciation and amortization 86,954 82,416 820,321
Impairment loss 2,425 1,120 22,877
Increase/(decrease) in allowance for doubtful receivables 239 334 2,255
Increase/(decrease) in reserve for warranty expenses (19,020) 18,732 (179,434)
In crease/(decrease) in reserve for loss on business of subsidiaries and affiliates 292 529 2,755
Increase/(decrease) in liability for retirement benefits (2,112) (4,953) (19,925)
Interest and dividend income (5,076) (3,540) (47,887)
Interest expense 7,442 9,383 70,208
Equity in net loss/(income) of affiliated companies (32,366) (30,880) (305,340)
Lo ss/(gain) on sale and retirement of property, plant and equipment, net 4,775 4,899 45,047
Decrease/(increase) in trade notes and accounts receivable (3,941) (19,220) (37,179)
Decrease/(increase) in inventories (29,966) (11,884) (282,698)
Increase/(decrease) in trade notes and accounts payable 29,888 18,343 281,962
Increase/(decrease) in other current liabilities 26,384 19,366 248,906
Other (8,780) (13,070) (82,831)
Subtotal 214,622 199,988 2,024,735
Interest and dividends received 34,892 17,882 329,170
Interest paid (8,333) (9,193) (78,613)
Income taxes refunded/(paid) (33,386) (47,580) (314,962)
Net cash provided by/(used in) operating activities ¥207,795 ¥161,097 $1,960,330
See accompanying notes on our official website. http://www.mazda.com/en/investors/library/annual/
CONSOLIDATED STATEMENTS OF CASH FLOWSMazda Motor Corporation and Consolidated Subsidiaries
Years ended March 31, 2018 and 2017
55MAZDA ANNUAL REPORT 2018
Financial Section
Millions of yen
Thousands ofU.S. dollars
(Note 1)
2018 2017 2018
Cash flows from investing activities:
Net decrease/(increase) in time deposits ¥ (10,166) ¥ 26,996 $ (95,906)
Net decrease/(increase) in securities — 3,000 —
Purchase of investment securities (55,698) (6,480) (525,453)
Proceeds from sales and redemption of investment securities 3,450 581 32,547
Acquisition of property, plant and equipment (87,063) (78,232) (821,349)
Proceeds from sale of property, plant and equipment 3,715 1,907 35,047
Acquisition of intangible assets (12,120) (11,475) (114,340)
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation 447 — 4,217
Net decrease/(increase) in short-term loans receivable 401 20 3,783
Payments of long-term loans receivable (483) (428) (4,557)
Collections of long-term loans receivable 281 682 2,651
Other (2,753) (322) (25,970)
Net cash provided by/(used in) investing activities (159,989) (63,751) (1,509,330)
Cash flows from financing activities:
Net increase/(decrease) in short-term debt (28,283) 10,399 (266,821)
Proceeds from long-term debt 122,321 96,885 1,153,972
Repayments of long-term debt (92,271) (232,716) (870,481)
Proceeds from issuance of common stock 49,780 — 469,623
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation — (6,356) —
Cash dividends paid (20,924) (17,935) (197,397)
Cash dividends paid to non-controlling interests (164) (172) (1,547)
Net decrease/(increase) in treasury stock 2 (3) 19
Net cash provided by/(used in) financing activities 30,461 (149,898) 287,368
Effect of exchange rate fluctuations on cash and cash equivalents (277) 6,156 (2,613)
Net increase/(decrease) in cash and cash equivalents 77,990 (46,396) 735,755
Cash and cash equivalents at beginning of the period 526,864 568,714 4,970,415
Increase in cash and cash equivalents from newly consolidated subsidiaries — 4,790 —
Decrease in cash and cash equivalents from exclusion of subsidiaries from consolidation — (244) —
Cash and cash equivalents at end of the period ¥ 604,854 ¥ 526,864 $ 5,706,170
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Name: Mazda Motor Corporation
Founded: January 1920
Head Office: 3-1 Shinchi, Fuchu-cho, Aki-gun, Hiroshima 730-8670, Japan Phone: +81 (82) 282-1111
Main business lines: Manufacture and sales of passenger cars and commercial vehicles
Capital: ¥284.0 billion
Number of employees: 49,755 (consolidated)
Research and development sites: Head Office, Mazda R&D Center (Yokohama),
Mazda North American Operations (USA), Mazda Motor Europe (Germany), China Engineering Support Center (China)
Production sites: Japan: Hiroshima Plant (Head Office, Ujina), Hofu Plant (Nishinoura, Nakanoseki), Miyoshi Plant Overseas: China, Thailand, Mexico, Vietnam*1, Malaysia*2, Russia*2 Sales companies: Japan: 220 Overseas: 140
Principal products: Four-wheeled vehicles, gasoline reciprocating engines, diesel engines, automatic and manual transmissions for vehicles
*1 Some models are assembled locally. (Volume is not disclosed.)*2 Assembly only (Volume is not disclosed.)
CORPORATE DATA (As of March 31, 2018)
For Requests and InquiriesFor inquiries concerning this annual report, please contact:
IR Group, Financial Planning Department, Financial Services DivisionMazda Motor Corporation3-1 Shinchi, Fuchu-cho, Aki-gun, Hiroshima 730-8670, JapanPhone: +81 (82) 282-1111
Forward-Looking StatementsStatements made in this annual report with respect to Mazda’s plans, strategies, and future performance are forward-looking statements based on management’s assumptions and beliefs in the light of information currently available, and involve risks and uncertainties. Potential risks and uncertainties include, but are not limited to: sudden changes in general economic conditions in Mazda’s markets and operating environment; exchange rates; the ability of Mazda and its subsidiaries to develop and introduce products that incorporate new technology in a timely manner and to manufacture them in a cost-effective way; and fluctuations in stock markets. Accordingly, actual results could differ materially from those contained in any forward-looking statements.
Note on Model NamesUnless otherwise stated, model names appearing in this annual report are those generally used in international markets. In some cases, names used in the domestic market differ: Mazda2 (in Japan: Mazda Demio), Mazda3 (Mazda Axela), Mazda6 (Mazda Atenza), Mazda MX-5 (Mazda Roadster).
Authorized: 1,200,000,000 shares
Issued: 631,803,979 shares
Number of shareholders: 162,708
Listing: Tokyo Stock Exchange, First Section
Code: 7261
Fiscal year-end: March 31
Transfer agent: Sumitomo Mitsui Trust Bank, Limited 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan
Major Shareholders
Shareholder
No. ofshares owned(Thousands)
Ratio (%)
Japan Trustee Services Bank, Ltd. (Trust) 33,305 5.3
Toyota Motor Corporation 31,928 5.1
The Master Trust Bank of Japan, Ltd. (Trust) 29,367 4.7
Sumitomo Mitsui Banking Corporation 12,857 2.0
Japan Trustee Services Bank, Ltd. (Trust 9) 12,684 2.0
BNYMSANV AS AGENT/ CLIENTS LUX UCITS NON TREATY 1
12,428 2.0
Japan Trustee Services Bank, Ltd. (Trust 5) 11,993 1.9
STATE STREET BANK WEST CLIENT – TREATY 505234
10,412 1.7
Japan Trustee Services Bank, Ltd. (Trust 1) 8,901 1.4
Japan Trustee Services Bank, Ltd. (Trust 7) 8,864 1.4
Note: Treasury stock of 2,050,849 shares is excluded in the calculation of the ratio
STOCK INFORMATION (As of March 31, 2018)
Breakdown of Shareholders
Japanese securities companies3.4%21,722 thousand shares
Other Japanese corporations12.9%81,296 thousand shares
Japanese individuals and others*18.3%115,432 thousand shares
Japanese financial institutions29.3%185,035 thousand shares
Foreign institutions and others36.1%228,319 thousand shares
* Treasury stock is included in Japanese individuals and others.
Compilation of Mazda’s CSR Activities
Mazda Sustainability Report 2018(Date of publication: October 2018)
http://www.mazda.com/en/csr/report/download/
Investor RelationsIncludes the president’s message,financial results, presentation documentshttp://www.mazda.com/en/investors/
CSRIncludes environmental protection,social contributions, approaches to safetyhttp://www.mazda.com/en/csr/
About MazdaIncludes Mazda Corporate Vision,Company profilehttp://www.mazda.com/en/about/
( IN-DEPTH VERSION)
SUSTAINABILITY REPORT 2018
56 MAZDA ANNUAL REPORT 2018
STOCK INFORMATION (As of March 31, 2018)
We love cars and want people to enjoy fulfilling lives through cars.
We envision cars existing sustainably with the earth and society,
and we will continue to tackle challenges with creative ideas.
1. Brighten people’s lives through car ownership.
2. Offer cars that are sustainable with the earth and society to more people.
3. Embrace challenges and seek to master the Doh (“Way” or “Path”) of creativity.
C O R P O R A T E V I S I O N
MAZDA ANNUAL REPORT 2018 57
YEAR ENDED MARCH 31, 2018
ANNUAL REPORT 2018
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